Semiconductor supplier Semtech plans to purchase Sierra Wireless, a deal worth $1.2 billion in all-cash.

Semiconductor and analog manufacturing company Semtech Corporation plans to purchase all the shares of Sierra Wireless. Sierra Wireless is an Internet service provider based in Canada.

The acquisition deal includes $31 for each share, valued at $1.2 billion. The acquisition is said to proceed in cash only. The deal is expected to multiply the annual revenue of Semtech

A step forward in technological growth

The acquisition is believed to bring together the higher bandwidth abilities of cellular with the ultra-low power features of LoRa. As a result, easy-to-use and convenient solutions will be developed to advance innovation in the global IoT market.

The collaboration between Semtech and Sierra Wireless will enable the advancement in digitization across the different markets with an absolute focus on ‘chip-to-cloud’ software. Semtech expects the cellular capabilities of Sierra Wireless will improve the connectivity solutions with LoRa-enabled nodes. As a result, a unique and innovative IoT portfolio will be developed. Innovative cloud services and platforms offering absolute security, geolocation features and device management will be created to power and optimize the applications.

Words from Semtech’s CEO

“We believe the next era of technology growth is the full digitization of our industrial world – the Internet of Everything”, said Semtech CEO Mohan Maheswaran. “The acquisition is a critical part of bringing this vision to life through the combination of cellular, LoRa and Cloud services.”

“Together, with the world-class Sierra Wireless engineering team, we will be positioned to advance the market with multi-radio solutions that bring new chip-to-cloud services to support customers and grow our business.”

The procurement of this deal will aid in building a solid and successful portfolio of connectivity goods in the IoT market. Furthermore, it also benefits Semtech in several ways, potentially doubling revenue and increasing market expansion.

The shares of Semtech rose by 1.5 percent to $56 after announcing the deal plan. The deal is expected to immediately boost Semtech’s income per share even before the collaboration, leading to almost $40M operational collaboration in the 10-14 months of the deal.