by Steve Hoffenberg | 8/5/2022
Semtech has been a US-based supplier of semiconductors and related technology since Dwight Eisenhower was the President (1960). But it wasn’t until 2012 that the company acquired a small French firm called Cycleo for the price of $5M, in what we at VDC said “might be viewed years from now as one of the greatest bargains ever for a tech acquisition." Cycleo had developed the intellectual property for a new long-range wireless network technology which Semtech dubbed LoRa, and began to supply LoRa chipsets and license the IP to other chipmakers. (The company does not build or operate LoRa networks.) As VDC readers undoubtedly know, LoRa and its network protocol LoRaWAN have gone on to become leading technologies for low-power wide-area networks (LPWANs) used for IoT wireless communications, often competing with cellular-based LPWANs such as LTE-M and NB-IoT.
Thus, we noted with great interest on August 2, 2022, when Semtech announced it was acquiring Sierra Wireless, a leading supplier of cellular IoT modules, gateways, and IoT cloud services, in an all-cash deal for $1.2 billion. You can see Semtech’s press release here, and a PDF of its investor presentation here. We won’t delve too far into the details, but note a few points:
VDC’s Questions Beyond the direct financial implications of taking on over a billion dollars in debt, the acquisition raises a few market-oriented questions for us about what happens next: