Sierra Wireless is poised to expand into the growing Machine-to-Machine (M2M) sector.
The firm wants to acquire software companies as well as those focused on connecting industrial machines.
It was recently reported how Sierra will pay $5.9 million for module assets belonging to AnyData's M2M module and modem business. The deal is expected to close soon, according to Rethink Wireless. Also, Sierra bought the M2M business of Sagemcom SAS (News - Alert) for $61.9 million in August 2012.
Now, it focuses on AirLink intelligent gateways and routers, AirPrime embedded modules, and the AirVantage M2M cloud platform.
Looking back, Sierra concentrated more on M2M in 2009, when it acquired Wavecom. Last year it was top in the cellular M2M module market, with a 34 percent market share, according to ABI Research (News - Alert).
The modules are used in health-care to remotely monitor patients, for household security systems via a smartphone, and for autos, so a broken car can send a signal. Its business now revolves around three product lines – AirPrime embedded modules, AirLink (News - Alert) intelligent gateways and routers, and the AirVantage M2M cloud platform.
CEO Jason Cohenour said, while discussing Q1 earnings, that he wants "to accelerate growth and value creation through a targeted M&A strategy. We have an excellent track record of acquiring great companies, integrating them well and creating value for shareholders. We intend to extend this track record."
The company is looking for opportunities in North America and Europe for hardware and software providers related to M2M.
The company is interested in expansion as the Internet of Everything is expected to double in the next five years to about $200 billion, according to ABI Research. By 2017, M2M connections will jump about 24 percent, to 545 million, Infonetics added.
“Over time, every machine that can benefit from being connected will be connected in some way,” Cohenour told Bloomberg (News - Alert) News. “We want to be the leader.”
During the next five years, M2M connections will see the largest sector growth in health care: by 74 percent. The auto sector is expected to increase by 42 percent, according to Cisco Systems (News - Alert). In both sectors Sierra provides Internet modules.
Next month, Sierra will likely report that its revenue dropped 30 percent to $113.6 million in Q3, compared to Q3 of 2012, according to a Bloomberg survey.
Edited by Ryan Sartor