Sierra Wireless is setting its sights on higher-margin Internet of Things (IoT) solutions as the company divest its Shenzhen-based automotive embedded business to Rolling Wireless (H.K.) for US$165 million in cash.
With this acquisition, Rolling Wireless (H.K.), which is a consortium led by Fibocom Wireless of Shenzhen, will take over Sierra Wireless’s automotive applications business valued at US$166 million in 2019 and its 150 employees.
“This transaction will improve our balance sheet and allow us to expand our R&D centre in Richmond, British Columbia to accelerate our innovation in integrated IoT solutions and 5G modules, gateways and routers,” said Kent Thexton, president and CEO of Sierra Wireless, pointing out that letting of the automotive embedded business enables the company to fully focus on its integrated IoT solutions that deliver high-value recurring revenue.
Sierra Wireless has been a pioneer in the wireless communications segment - touting as the first-to-market with the world’s smallest module, embedded software, embedded SIM, open source Linux based embedded platform, most rugged industrial gateway and 4G LTE and LTE-PRO embedded solutions to name a few.
Since launching the world’s first cellular embedded module in 1997, the company has shipped over 150 million devices to connect the IoT in over 130 countries. Its embedded solutions have been deployed in PCs and mobile devices, smart meter modules and routers for smart grids.
Indeed, Sierra Wireless routers have bee deployed in over 50% of top 100 police departments for cruisers and incident response vehicles, in over 25% of top 50 for transit vehicle agencies for improved passenger services and operations; and, in three out of four high performance EMS systems to support paramedics in the field.
With a strengthened focus on its higher-margin IoT Solutions business segment, Sierra Wireless will continue to target key industrial and enterprise markets in North America, Europe and the APAC region.
The improved financial profile means that Sierra Wireless will be better positioned to address the broader multi-billion-dollar IoT solutions market opportunity, said in a statement.
Meanwhile, the company will continue to invest in other product lines in its Embedded Broadband segment, specifically high-speed cellular modules typically used in Enterprise applications. The divested automotive business was under this segment.