Netgear buys Aircard as Belkin acquires rival Linksys

Mobile internet solutions provider Sierra Wireless has sold its mobile broadband device business, Aircard, to networking vendor Netgear for €138m in cash. Meanwhile, home networking and cable provider Belkin has taken Netgear’s rival Linksys off Cisco’s hands for an undisclosed fee.

Sierra Wireless’ Aircard business focuses on manufacturing mobile broadband devices, such as PC card slots, ExpressCard slots, USB ports or mobile wifi hotspots, which connect notebooks and other electronic devices to 3G and 4G networks. Under the terms of the transaction, Netgear will acquire the assets and operations of the AirCard business, including customer relationships, products, intellectual property, inventory and fixed asset.

The networking vendor will also take on the Aircard’s liabilities, including existing warranty commitments and other customer obligations, which are valued at approximately $6.5m. Approximately 160 employees will be transferred from Sierra Wireless to Netgear.

The sale will enable Sierra Wireless to focus on the M2M market. “In addition to realising 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,” said Jason Cohenour, president and CEO at Sierra Wireless.

Meanwhile, Belkin said that it intends to maintain the Linksys brand and added that it will offer support for Linksys products as part of the transaction. All valid warranties will be honoured by Belkin, the firm said, for current and future Linksys products. After the transaction closes, Belkin said that it will account for approximately 30 per cent of the US retail home and small business networking market.

“With complementary innovation and engineering strategies in the combined organisation, Belkin will be able to create new opportunities for consumers, distribution partners and resellers, and will have the strongest retail presence in the US networking marketplace.” said Chet Pipkin, CEO of Belkin. “Belkin also will have access to a large installed base that will be able to upgrade their networking environment to take advantage of new technologies in the smartphone, tablet, notebook and home automation arenas.”

Both transactions are subject to regulatory conditions and are expected to close in March 2013.