Global IoT solution vendor Sierra Wireless has signed an agreement to buy the Melbourne-based M2M group of companies for US$19.8 million.

Canada-based Sierra Wireless, which has more than 1,300 employees and recorded US$793.6 million in revenue in the 2018 financial year, signed the agreement this week.

The purchase price of US$19.8 million will include an US$18.8 million cash consideration for 100 percent of the equity, plus approximately US$1.0 million for the retirement of certain obligations, Sierra Wireless stated. It expects the deal to close in January 2020, subject to the satisfaction of customary closing conditions.

Sierra Wireless views the Australian companies, which it called M2M Group, as an “excellent strategic fit” and a “solid platform” to increase its IoT services and solutions business in Australia and Southeast Asia.

It is impressed with M2M Group's "strong history of IoT leadership and solid carrier relations in the region."

It also pointed to M2M Group’s subscription-based recurring revenues, which reached US$9.2 million in the last 12 months. That’s more than half of the Australian company’s overall yearly revenue, which totalled US$17.9 million. M2M Group’s subscription revenue has been growing rapidly over the last several years, according to Sierra Wireless.

If the deal completes, it will give Sierra Wireless ownership of M2M One, a business that sells SIM cards and data plans that enable M2M and IoT devices to connect to Telstra’s network. M2M One’s web site states it has also “taken the first steps to deliver a range of secure, scalable, managed services to cater for mission-critical applications” by delivering VPN offerings.

A statement on the M2M One web site about the acquisition reads: "[Sierra Wireless] are developing leading edge products and services that will be the cornerstone of our future offerings. As a result, the M2M One team will be better placed to provide our personal service, backed by the best available technology."

The acquisition also includes M2M Connectivity, a specialist distribution and services business. Its web site states that it sells wireless modules, modems and antennas. These include modules and modems for LPWAN, cellular (4G/LTE, 3G/HSPA,), satellite (Inmarsat, Orbcomm, Globalstar Simplex and Iridium) and short range industrial RF.

M2M Connectivity’s web site also lists software development, support and IoT design services. These services includes “future-proofing 3G/ 4G / 5G” and hardware certification.

Sierra Wireless lays claim to launching the world’s first cellular embedded module in 1997. Its offerings include SIMs, networking hardware, embedded wireless modules, managed IoT bundles that include network access and installation, tracking device bundles and a cloud IoT platform.

It has research and development centres in North America, Europe and Asia. Its projects include current work with Microsoft to develop a “full stack IoT solution”.