Sierra Wireless Acquires Cradlepoint

(Business News & Technology News, 8 Apr 2008)

Sierra Wireless Inc. has announced a definitive agreement to acquire CradlePoint Inc., a developer and supplier of wireless networking products and docking solutions for mobile enterprise, industrial and consumer applications.

Located in Boise, Idaho and currently has 40 full time employees, CradlePoint is an innovative provider of mobile broadband networking solutions with unique products, including the PHS-300 personal hotspot and MBR-1000 mobile broadband router. CradlePoint achieved revenue of $6.5 million in 2007 and is expected to grow revenue to approximately $25 million in 2008.

"The acquisition of CradlePoint is consistent with our strategy of strengthening our differentiation and expanding our position in the mobile computing value chain," says Jason Cohenour, President and CEO of Sierra Wireless. "We believe that adding CradlePoint's mobile broadband networking and docking solutions to our product portfolio extends our offering and value proposition to mobile operators and vertical OEM customers. Furthermore, we believe that the Mobile Broadband Networking category is poised for rapid growth, and that CradlePoint brings innovative mobile networking technology and talent to our team. We view CradlePoint as an important strategic addition to our business."

"By joining forces with Sierra Wireless, CradlePoint gains immediate access to established global distribution channels, leading edge mobile broadband technology, product marketing expertise, large scale supply chain capabilities and working capital to drive further growth. We bring an innovative product line of mobile broadband networking devices powered by our unique WiPipe platform, and solid relationships with North American network operators, vertical OEMs, retail channels and application providers," says Pat Sewall, CEO of CradlePoint. "We are enthusiastic about becoming part of the Sierra Wireless team."

Under the terms of the definitive agreement, Sierra Wireless will pay cash consideration of $21.8 million and will issue 462,963 shares to the shareholders of CradlePoint. Based on the company's current stock price, this represents a total transaction value of $30.2 million. Following closing of the transaction, CradlePoint shareholders will hold approximately 1.5 percent of the combined entity, based on the issued and outstanding shares.

Completion of the acquisition is expected in July, 2008 and is conditional upon, among other things, regulatory and CradlePoint shareholder approval. CradlePoint shareholders representing more than a majority of outstanding shares have signed voting agreements in favor of the transaction.

Following closing, the business will be fully integrated into Sierra Wireless. Sewall will become Vice-President and General Manager of the Sierra Wireless Mobile Broadband Networking product group in Boise, Idaho and will report to Trent Punnett, Senior Vice President of Marketing and Corporate Development.

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