Sierra Wireless Announces Acquisition of Cradlepoint, Inc.

Vancouver (Canada)-April 07, 2008

Sierra Wireless, Inc. (NASDAQ:  SWIR, TSX:  SW) announced today a definitive agreement to acquire CradlePoint, Inc. (“CradlePoint”), a privately-held developer and supplier of wireless networking products and docking solutions for mobile enterprise, industrial and consumer applications.  

CradlePoint is located in Boise, Idaho and currently has 40 full time employees.  The company 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”, said Jason Cohenour, President and Chief Executive Officer 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”, said Pat Sewall, Chief Executive Officer of CradlePoint, Inc. “We are enthusiastic about becoming part of the Sierra Wireless team.”
 
Acquisition Rationale
The combination of Sierra Wireless’ leading mobile broadband solutions and CradlePoint’s mobile networking technology and expertise is expected to deliver significant benefits:   

  • Establishes an immediate presence in the emerging, and potentially high growth, Mobile Broadband Networking category
  • Expands our mobile computing product line up and addressable market, while leveraging our established global channels
  • Strengthens our differentiation through enhanced IP networking and embedded software capability
  • Expands our product offering and value proposition for key Vertical OEM customers in the industrial handheld segment

Acquisition Detail
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 our 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% 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.  Pat Sewall, CradlePoint’s CEO, 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.

CIBC World Markets Inc. was engaged by Sierra Wireless to provide a fairness opinion.  Blake Cassels & Graydon LLP is serving as Sierra Wireless’ Canadian counsel.  Stoel Rives LLP is serving as U.S. counsel to CradlePoint.
 
Financial Guidance
Going forward, we expect the acquisition to increase our revenue and earnings.  We expect modest restructuring and integration costs to be incurred during the second half of 2008.  The acquisition is expected to be accretive to earnings by the end of 2008, excluding restructuring and integration costs.

Forward-Looking Statements
Certain statements in this conference call/press release that are not based on historical facts constitute forward-looking statements or forward-looking information within the meaning of applicable securities laws (“forward-looking statements”).  These forward-looking statements are not promises or guarantees of future performance but are only predictions that relate to future events, conditions or circumstances or our future results, performance, achievements or developments and are subject to substantial known and unknown risks, assumptions, uncertainties and other factors that could cause our actual results, performance, achievements or developments in our business or in our industry to differ materially from those expressed, anticipated or implied by such forward-looking statements.  Forward-looking statements include all financial guidance, disclosure regarding possible events, conditions, circumstances or results of operations that are based on assumptions about future economic conditions, courses of action and other future events.  We caution you not to place undue reliance upon any such forward-looking statements, which speak only as of the date they are made.  These forward-looking statements appear in a number of different places in this conference call/press release and can be identified by words such as “may”, “estimates”, “projects”, “expects”, “intends”, “believes”, “plans”, “anticipates”, or their negatives or other comparable words.  Forward-looking statements include statements regarding the outlook for our future operations, plans and timing for the introduction or enhancement of our services and products, statements concerning strategies or developments, statements about future market conditions, supply conditions, end customer demand conditions, channel inventory and sell through, revenue, gross margin, operating expenses, profits, forecasts of future costs and expenditures, the outcome of legal proceedings, and other expectations, intentions and plans that are not historical fact.  The risk factors and uncertainties that may affect our actual results, performance, achievements or developments are many and include, amongst others, our ability to develop, manufacture, supply and market new products that we do not produce today that meet the needs of customers and gain commercial acceptance, our reliance on the deployment of next generation networks by major wireless operators, the continuous commitment of our customers, increased competition.  These risk factors and others are discussed in our Annual Information Form which may be found on SEDAR at www.sedar.com and in our other regulatory filings with the Securities and Exchange Commission in the United States and the Provincial Securities Commissions in Canada.  Many of these factors and uncertainties are beyond the control of the Company.  Consequently, all forward-looking statements in this conference call/press release are qualified by this cautionary statement and there can be no assurance that actual results, performance, achievements or developments anticipated by the Company will be realized.  Forward-looking statements are based on management’s current plans, estimates, projections, beliefs and opinions and the Company does not undertake any obligation to update forward-looking statements should the assumptions related to these plans, estimates, projections, beliefs and opinions change. 

About Sierra Wireless
Sierra Wireless (NASDAQ: SWIR – TSX: SW) modems and software connect people and systems to mobile broadband networks around the world. The Company offers a diverse product portfolio addressing enterprise, consumer, original equipment manufacturer, specialized vertical industry, and machine-to-machine markets, and provides professional services to customers requiring expertise in wireless design, integration, and carrier certification. For more information about Sierra Wireless, visit www.sierrawireless.com

“AirCard” is a registered trademark of Sierra Wireless. Other product or service names mentioned herein may be the trademarks of their respective owners.

About CradlePoint
CradlePoint engineers and manufactures Mobile Broadband Networking devices, Docking and Connectivity Solutions and software platforms that facilitate secure mobile computing.   From docking cradles for use with handheld terminals to sophisticated mobile broadband routers, the company leverages telephony, Ethernet, and mobile broadband to make Internet access portable, simple, and robust. CradlePoint’s unique WiPipe™ technology provides access and traffic management to improve the security and quality of the online mobile experience and to support new revenue streams for network providers.

CradlePoint is a privately held company with headquarters in Boise, Idaho. To learn more about CradlePoint, please view http://www.cradlepoint.com/

Conference Call, Webcast and Instant Replay
We will host a conference call on Monday, April 7, 2008 at 3:30 PM PST, 6:30 PM EST. You can participate in the conference call either via telephone or webcast. To participate in this conference call, please connect approximately ten minutes prior to the commencement of the call.

Telephone participation:
Please dial the following number:
1-800-733-7560   Passcode:  Not required
or
1-416-644-3414   Passcode:  Not required

Webcast: 
The Company will also broadcast its conference call over the Internet. To access the web broadcast, click on this URL enter
 http://w.on24.com/r.htm?e=107791&s=1&k=6126B09DB6CBD0FE6E14C9D691AAB163

Should you be unable to participate, Instant Replay (audio and webcast) will be available following the conference call.

We look forward to having you participate in our call.


FOR FURTHER INFORMATION PLEASE CONTACT:
Sierra Wireless, Inc.
David G. McLennan
Chief Financial Officer
(604) 231-1185
Website: www.sierrawireless.com
Email: dmclennan@sierrawireless.com