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Sierra Wireless buys Sweden's Wireless Maingate in bid to expand M2M connectivity services

Sierra Wireless buys Sweden's Wireless Maingate in bid to expand M2M connectivity services

Sierra Wireless (NASDAQ:SWIR) (TSE:SW) has agreed to acquire Sweden-based Wireless Maingate for US$90 million in cash, the company said Monday. 

Maingate provides machine-to-machine (M2M) connectivity and data management services, with the deal expected to help Sierra accelerate its "device-to-cloud mission". 

“The acquisition of Maingate is a strong strategic fit for Sierra Wireless, said president and chief executive officer, Jason Cohenour.

“Maingate has a strong base of top-tier M2M customers and a proven technology platform that we believe will enable market expansion and accelerated services growth through our channels.”

Maingate has more than 500 customers across Europe, reaching a subscriber base of more than 500,000 connected devices, Sierra said. It is expecting 2014 revenue of over US$19 million, and EBITDA of US$6 million.

The deal, which is to wrap up in February, is anticipated to immediately add to Sierra's earnings.

The two companies will be able to offer customers in Europe complete "device-to-cloud" solutions, they said, with fully integrated hardware, embedded software development tools, cloud-based app development, device and subscription management as well as wireless services.

“Joining with Sierra Wireless enables us to accelerate our growth in Europe and broaden our customer base,” said Maingate's CEO Baard Eilertsen. 

“Enterprises throughout Europe are looking for efficient ways to connect their assets and digitize their businesses, and the combined offering from Sierra Wireless and Maingate is the perfect solution for that," he added.

Shares of Sierra rose 5.6 percent to C$51.99 in Toronto as of 11:30am ET today, extending year-to-date gains to more than double.

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