PARIS — Sierra Wireless, Inc. and Wavecom S.A. announced they have reached a memorandum of understanding so as to form a global leader in wireless data that would be positioned to benefit from the anticipated growth in wireless data for the mobile computing and M2M markets.
Under the terms of the MOU, Sierra Wireless said it will make a cash offer of 8.50 euros per ordinary share of Wavecom, and 31.93 euros per OCEANE convertible bond, amounting to an aggregate purchase price of approximately 218 million euros.
It is little to say that Wavecom (Issy Les Moulineaux, France) is courted these days. On Oct. 6, Gemalto indeed made an offer to buy Wavecom in a view to expand its business in the machine-to-machine market. It was then offering 7 euros for each Wavecom share, a premium of 72 percent over the last closing price.
Sierra Wireless' bid represents a premium of 21 percent over the offer for Wavecom shares announced by Gemalto on Oct. 6, 2008 and a 108-percent premium over the share price on Oct. 3, 2008, the last trading day prior to Gemalto's announcement of its offer. For the OCEANEs, the price represents a premium of 2 percent to their redemption value.
Gemalto, however, was less fortunate than Sierra Wireless in its attempt to gain affections and marry Wavecom.
Wavecom indicated that its board of directors had concluded that the proposed acquisition by Gemalto fails to deliver sufficient value to merit support.
Inversely, Wavecom said its board of directors has concluded that the proposed acquisition by Sierra Wireless "is in the best interest of the company, its employees, and, [] its shareholders."
"Sierra Wireless and Wavecom are a natural match," Ronald Black, CEO of Wavecom." The two companies share similar histories and a common culture of innovation and technology leadership in wireless data. Joining with Sierra Wireless is a unique opportunity for Wavecom, its customers and employees. Together, the companies are well positioned to provide the most competitive solutions in the market and to become a global leader in wireless data."
The game is not finished for Sierra Wireless yet, but Wavecom has agreed to support the transaction and has agreed to non-solicitation and right to match provisions.
