Sierra Wireless (TSX: SW, NASDAQ:SWIR) shares increased 7.6% on Tuesday (after lifting by more than 11% on Monday in the U.S. when the Canadian market was closed) after the company announced that it has entered into a $5.9 million agreement to acquire the assets of AnyDATA’s Machine to Machine (M2M) embedded module and modem business. AnyDATA Corporation is a fast growing privately held company headquartered in California with regional offices and operation centres in the U.S., Korea, India, and China.
Expanding Sierra’s Footprint
The deal adds AnyDATA’s products to Sierra’s solutions portfolio for equipment manufacturers such as automobile manufacturers and personal computer manufacturers. It also expands the company’s geographic reach, giving it a foothold in Korea, as a team of 16 sales and engineering staff from AnyDATA’s Korean operations will be joining Sierra. The deal adds to Sierra’s market leading position in the M2M market. Sierra already had an industry leading 34% market share before the deal.
M2M Market is Growing Rapidly
Infonetics Research predicts that revenue from M2M services will more than double from just under $15 billion in 2012 to $31 billion in 2017. As Sierra is now focused solely on the M2M business, it stands to benefit significantly from this growth.
Europe is in part driving this push that is bringing M2M to the automotive industry. The EU is supporting safety regulations and it is expected that by 2015, all new cars will be required to have M2M technology that enables them to automatically notify the nearest emergency centre when the driver has been in a crash. The cars will be required to send a minimum set of data including the exact location of the crash site, time of incident, and the direction of travel. Response times are expected to improve by as much as 60% due to this technology.
Automotive and Transportation Industry Make up One Third of M2M Market