01/28/2013 06:21 EST | Updated 03/30/2013 05:12 EDT

Sierra Wireless sells mobile modem business to NETGEAR Inc. for $138M cash

VANCOUVER - Wireless technology company Sierra Wireless (TSX:SW) announced Monday it has sold its AirCard division for US$138 million in cash, and will now focus on growing its business in machine-to-machine and connected device solutions.

The Vancouver-based company says the deal with Netgear Inc. (Nasdaq:NTGR) also includes approximately US$6.5 million in assumed liabilities as of Dec. 31, 2012.

“We are the world leader in this dynamic market, with the industry’s broadest product lineup, solutions across the value chain and an extensive, blue-chip customer base," said Jason Cohenour, president and CEO of Sierra Wireless.

"In addition to realizing a solid return for the AirCard business, this transaction will provide significant financial resources and capacity to accelerate our growth in M2M and connected device solutions."

The sale, which is expected to close in March, will include all assets and operations related to AirCard.

About 160 Sierra Wireless employees will be transferred to Netgear in the sale, along with facilities in Richmond, B.C., and Carlsbad, Calif.

The company says the deal will net it about US$100 million, after taxes, expenses and funds held in escrow.

Sierra Wireless says it will be looking at ways to return a portion of the proceeds to shareholders.

The company predicts preliminary estimates on revenue for the full year at US$644 million. It will release its fourth quarter and fiscal 2012 results on Feb. 6.

AirCards are modems used to connect notebooks, netbooks and other electronic devices to the Internet over 3G and 4G broadband networks.