By Lisa Kerner
Charlotte, N.C., Dec. 2 - Wavecom SA and Sierra Wireless, Inc. announced a memorandum of understanding that will combine the companies into a "global leader in wireless data."
Sierra will make a cash offer of €8.50 per ordinary share of Wavecom and €31.93 per Oceane convertible bond for a total purchase price of approximately €218 million, a joint news release said.
Concurrent separate tender offers will be held in France and the United States.
Wavecom's founders will tender their approximately 21% of the company's outstanding shares in the offer.
The transaction is expected to close in the first quarter of 2009, after which Wavecom will operate as a Sierra Wireless business unit based in Paris.
As part of the understanding, Wavecom agreed to non-solicitation and right-to-match provisions. The memorandum of understanding also provides for payment to Sierra Wireless of a break-up fee of €3.27 million in some circumstances.
Sierra Wireless said it will fund the offer using cash available on its balance sheet and available credit facilities. The company has drawn a €218 million letter of credit secured by cash and an €80.5 million secured term facility underwritten by CIBC World Markets Inc. and TD Securities Inc.
The offer is a 21% premium over Gemalto SA's Oct. 6 offer for Wavecom, which Wavecom rejected.
As a result of the Sierra Wireless offer, Wavecom said its Dec. 8 meeting of shareholders will be adjourned. Wavecom shareholders were going to vote on a special and immediate cash distribution of €1.00 per share in light of Gemalto's unsolicited offer, which is expected to expire on Dec. 15.
In October, Wavecom's board determined that Gemalto's €7.00-per-share offer for the company was not in the best interest of Wavecom or its shareholders.
It was previously reported that Gemalto, a Meudon, France-based digital security solutions provider and a subsidiary of Gemalto NV, modified the terms of its offer for Wavecom, valuing each Wavecom Oceane at €31.30 plus accrued interest.
"The acquisition of Wavecom will be the foundation of our plans to substantially expand our position in the global M2M (machine-to-machine) market," Sierra Wireless president and chief executive officer Jason Cohenour said in the release.
"Furthermore, Wavecom will significantly increase our scale and capabilities in Europe and Asia - both of which are important geographical expansion opportunities for the company."
CIBC, World Markets Inc., Lazard and TD Securities are advising Sierra Wireless. Merrill Lynch is financial adviser to Wavecom.
Based in Richmond, B.C., Sierra Wireless provides wireless wide area modem solutions for the mobile computing, rugged mobile and M2M markets.
Wavecom is an Issy-Les-Moulineaux, France-based wireless communications provider.
| Acquirer: | Sierra Wireless, Inc.
|
| Target: | Wavecom SA
|
| Announcement date: | Dec. 2
|
| Transaction total: | €218 million
|
| Price per share: | €8.50
|
| Expected closing: | First quarter of 2009
|
| Break-up fee: | €3.27 million
|
| Stock price for target: | Nasdaq: WVCM: $8.86 on Dec. 1
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
