UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 6-K
Report
of Foreign issuer
Pursuant to Rule 13a-16 or 15d-16 of the
Securities Exchange Act of
1934
For the
Month of August
2017
(Commission File. No 0-30718).
SIERRA WIRELESS, INC., A CANADIAN CORPORATION |
(Translation of registrant’s name in English) |
13811 Wireless Way Richmond, British Columbia, Canada V6V 3A4 |
(Address of principal executive offices and zip code) |
Registrant’s Telephone Number, including area code: 604-231-1100
Indicate by
check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F:
Form 20-F 40-F X
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:
Yes: ____ No: X
Sierra Wireless to Acquire Numerex Corp.
Acquisition accelerates Device-to-Cloud strategy and scales recurring revenue from IoT services
VANCOUVER, British Columbia--(BUSINESS WIRE)--August 2, 2017--Sierra Wireless, Inc. (“Sierra Wireless”) (NASDAQ: SWIR) (TSX: SW), the leading provider of fully integrated device-to-cloud solutions for the Internet of Things (IoT), and Numerex Corp. (“Numerex”) (NASDAQ:NMRX) have entered into a definitive merger agreement (the “Merger Agreement”) under which Sierra Wireless will acquire Numerex in a stock-for-stock merger transaction (the “Transaction”). The Transaction is valued at approximately US$107 million based on Sierra Wireless’ closing stock price on August 1, 2017 of US$29.65 per share and represents a premium of 17.5 percent to Numerex’s 20-day average share price. The acquisition expands Sierra Wireless’ position as a leading global IoT pure-play and will significantly increase its subscription-based recurring services revenue.
Under the terms of the Merger Agreement, Numerex shareholders will receive a fixed exchange ratio of 0.18 common shares of Sierra Wireless for each share of Numerex common stock. Upon completion of the Transaction, Numerex will become a subsidiary of Sierra Wireless and Numerex shareholders will own approximately 10 percent of the common shares of Sierra Wireless on a fully diluted basis. Concurrent with closing, Numerex’s debt of approximately $20 million including fees shall be repaid with Sierra Wireless cash. The Transaction is expected to close in January 2018 subject to the receipt of Numerex shareholder approval and certain regulatory and government approvals, and satisfaction of other customary closing conditions.
“The acquisition of Numerex accelerates our IoT device-to-cloud strategy by adding an established customer base, significant sales capacity, proven solutions and recurring revenue scale,” said Jason Cohenour, President and CEO of Sierra Wireless. “The combination of Sierra Wireless and Numerex will represent a powerful business and technology platform that will enable the company to drive a global leadership position in IoT services and solutions.”
“We believe that combining with Sierra Wireless will strengthen Numerex’s business, advance our product offerings, and accelerate the growth of our recurring revenue streams,” said Ken Gayron, Interim CEO and CFO of Numerex. “The transaction also provides our shareholders the opportunity to participate in the considerable upside potential of the combined company.”
Transaction Benefits
Sierra Wireless expects that recurring revenue from its services business will increase from approximately four percent of annualized revenue today to more than ten percent of annualized revenue upon completion of the Transaction.
Sierra Wireless expects this acquisition to be accretive to non-GAAP earnings per common share approximately twelve months after the close of the Transaction, assuming run-rate synergies and excluding one-time charges.
Board Approval
The Board of Directors of Sierra Wireless has
unanimously approved the Transaction. The Board of Directors of Numerex
has unanimously approved the Transaction and recommends that Numerex
shareholders vote in favor of the Transaction. Numerex shareholders
owning approximately 27 percent of Numerex’s outstanding stock have
entered into voting agreements under which they have agreed to vote in
favor of the Transaction.
Advisors
RBC Capital Markets is acting as financial advisor to
Sierra Wireless. Blake, Cassels & Graydon LLP, Skadden, Arps, Slate,
Meagher & Flom LLP, and Jones Day are acting as Sierra Wireless’ legal
advisors. Deutsche Bank is acting as financial advisor to Numerex and
Arnold & Porter Kaye Scholer LLP is acting as Numerex’s legal advisor.
Conference call and webcast
Sierra Wireless will discuss the
transaction during its scheduled Second Quarter earnings conference call
after market close on Wednesday, August 2, 2017. Sierra Wireless
President and CEO, Jason Cohenour, and CFO, David McLennan, will host a
conference call and webcast at 5:30 p.m. Eastern time.
To participate in this conference call, please dial the following:
Toll-free
(Canada and US): 1-877-201-0168
Alternate number: 1-647-788-4901
Conference
ID: 29726957
A webcast presentation will also be available for viewing in conjunction with the conference call. To access the webcast, please visit: http://event.on24.com/r.htm?e=1435075&s=1&k=2A13E1D01D92FF840DAA2ACE23144F97.
About Sierra Wireless
Sierra Wireless (NASDAQ: SWIR) (TSX: SW)
is building the Internet of Things with intelligent wireless solutions
that empower organizations to innovate in the connected world. Customers
Start with Sierra because we offer the industry’s most comprehensive
portfolio of 2G, 3G and 4G embedded modules and gateways, seamlessly
integrated with our secure cloud and connectivity services. OEMs and
enterprises worldwide trust our innovative solutions to get their
connected products and services to market faster. Sierra Wireless has
more than 1,100 employees globally and operates R&D centers in North
America, Europe and Asia. For more information, visit www.sierrawireless.com.
About Numerex Corp.
Numerex Corp. (NASDAQ:NMRX) is a leading
provider of managed enterprise solutions enabling the Internet of Things
(IoT). The Company's solutions produce new revenue streams or create
operating efficiencies for its customers. Numerex provides its
technology and services through its integrated platforms, which are
generally sold on a subscription basis. The Company offers a portfolio
of managed end-to-end IoT solutions including smart devices, network
connectivity and service applications capable of addressing the needs of
a wide spectrum of vertical markets and industrial customers. The
Company's mission is to empower enterprise operations with world-class,
managed IoT solutions that are simple, innovative, scalable, and secure.
For additional information, please visit www.numerex.com.
Cautionary Note Regarding Forward-Looking Statements
Certain
statements and information in this press release constitute
forward-looking statements or forward-looking information within the
meaning of the U.S. Private Securities Litigation Reform Act of 1995 and
Canadian securities laws (“forward-looking statements”) including, but
not limited to, statements and information regarding the benefits of the
transaction, the combined company’s future business prospects,
performance and growth program, revenues and the expectation that the
acquisition will be accretive approximately one year after the closing
of the transaction.
Forward-looking statements:
No Offer or Solicitation
This press release is not intended to
and does not constitute an offer to sell or the solicitation of an offer
to buy, sell or solicit any securities or any proxy, vote or approval,
nor shall there be any sale of securities in any jurisdiction in which
such offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such jurisdiction. No
offer of securities shall be deemed to be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities Act
of 1933, as amended. This communication may be deemed to be solicitation
material in respect of the proposed acquisition of Numerex by Sierra
Wireless. In connection with the proposed merger, Sierra Wireless
intends to file with the U.S. Securities and Exchange Commission (“SEC”)
a registration statement on Form F-4, which will include a proxy
statement of Numerex that also constitutes a prospectus of Sierra
Wireless. After the registration statement is declared effective,
Numerex will mail the proxy statement/prospectus to its shareholders.
Investors are urged to read the proxy statement/prospectus (including
all amendments and supplements thereto) and other relevant documents
filed with the SEC carefully and in their entirety if and when they
become available because they will contain important information about
the proposed merger and related matters.
Additional Information about the Merger and Where to Find It
Investors
may obtain free copies of the registration statement, the proxy
statement/prospectus and other relevant documents filed by Sierra
Wireless and Numerex with the SEC (when they become available) through
the website maintained by the SEC at www.sec.gov. Copies of the
documents filed by Sierra Wireless with the SEC will also be available
free of charge on Sierra Wireless’ website at www.sierrawireless.com
or by contacting Sierra Wireless’ Investor Relations Department by
telephone at (604) 231-1137 or by e-mail to investor@sierrawireless.com.
Copies of the documents filed by Numerex with the SEC are available free
of charge on Numerex’s website at investor.numerex.com or by contacting
Numerex’s Investor Relations Department by telephone 770-615-1410 or by
e-mail to kgayron@numerex.com.
Participants in Solicitation Relating to the Merger
This
communication is not a solicitation of proxies in connection with the
proposed merger of Sierra Wireless and Numerex. However, Numerex and its
directors and executive officers may be deemed to be participants in the
solicitation of proxies from Numerex’s shareholders in respect of the
proposed merger. Information regarding Numerex’s directors and executive
officers can be found in Numerex’s Form 10-K/A filed with the SEC on May
1, 2017, as well as its other filings with the SEC. Additional
information regarding the interests of such potential participants,
including their respective interests by security holdings or otherwise,
will be set forth in the proxy statement/prospectus and other relevant
documents filed with the SEC in connection with the proposed merger if
and when they become available. These documents are available free of
charge on the SEC’s website and from Numerex using the sources indicated
above.
Non-GAAP Financial Measures
We disclose non-GAAP financial
measures as we believe they provide useful information on actual
operating performance and assist in comparisons from one period to
another. Readers are cautioned that non-GAAP financial measures do not
have any standardized meaning prescribed by U.S. GAAP and therefore may
not be comparable to similar measures presented by other companies.
Non-GAAP gross margin excludes the impact of stock-based compensation expense and related social taxes and certain other nonrecurring costs or recoveries.
Non-GAAP earnings (loss) from operations excludes the impact of stock-based compensation expense and related social taxes, amortization related to acquisitions, acquisition-related and integration expense, restructuring expense, impairment and certain other nonrecurring costs or recoveries.
In addition to the above, non-GAAP net earnings (loss) and non-GAAP earnings (loss) per share exclude the impact of foreign exchange gains or losses on translation of certain balance sheet accounts, unrealized foreign exchange gains or losses on forward contracts and certain tax adjustments.
We use the above-noted non-GAAP financial measures for planning purposes and to allow us to assess the performance of our business before including the impacts of the items noted above as they affect the comparability of our financial results. These non-GAAP measures are reviewed regularly by management and the Board of Directors as part of the ongoing internal assessment of our operating performance. We also use non-GAAP earnings from operations as one component in determining short-term incentive compensation for management employees.
CONTACT:
Sierra Wireless
Investors:
David Climie,
+1 (604) 231 1137
VP Investor Relations and Corporate Development
dclimie@sierrawireless.com
or
Media:
Kim
Homeniuk, +1 (604) 233 8028
Sr. Manager, Public Relations
khomeniuk@sierrawireless.com
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Sierra Wireless, Inc. |
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By: |
/s/ David G. McLennan |
David G. McLennan, Chief Financial Officer and Secretary |
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Date: |
August 2, 2017 |
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