SWIR Announces Acquisition of CradlePoint and Share Buyback
SWIR - Sierra Wireless (NASDAQ) - (Closing Price - $18.43)
Yesterday, Sierra Wireless announced it agreed to buy privately held CradlePoint Inc, which develops and supplies wireless networking products, in a cash and stock deal worth about 30.2 million.
The company expects the deal to add to earnings by the end of 2008, excluding restructuring and integration costs. The deal is expected to close in July.
Two analysts who follow Sierra Wireless said positive comments about the acquisition.
The company also announced that it would seek regulatory approval to purchase up to 1.56 million shares of its common stock on the Toronto Stock Exchange and the NASDAQ, representing approximately 5% of the common shares outstanding.
If the approval goes through the share buyback will obviously be a positive development because the share count will go down and EPS will increase. The potential share buyback also shows that Sierra Wireless feels its stock is undervalued.
These announcements provide two more positive reasons for owning Sierra Wireless.
Disclaimer: I have no position in SWIR.
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