Sierra Wireless, an Internet of Things company, is set to merge with M2M enterprise solutions provider Numerex in a move meant to boost the former’s recurring revenue from subscription-based services.

The $107 million deal will see Numerex shareholders receive 0.18 common shares of Sierra Wireless stock for each share of Numerex common stock. As part of the transaction, Numerex will become a subsidiary of Sierra Wireless, and Numerex’s $20 million in debt will be repaid using Sierra cash.

The deal is expected to close in January 2018.

According to Sierra, the merger will expand its position in the IoT space while also increasing its subscription-based recurring services revenue from around 4 percent of annualized revenue today to more than 10 percent once the deal is complete. Other benefits reportedly include expanding Sierra’s sales capacity, diversifying Sierra’s business and revenue mix, and accelerating the company’s IoT device-to-cloud strategy.

“The acquisition of Numerex accelerates our IoT device-to-cloud strategy by adding an established customer base, significant sales capacity, proven solutions, and recurring revenue scale,” Sierra Wireless CEO Jason Cohenour commented. “The combination of Sierra Wireless and Numerex will represent a powerful business and technology platform that will enable the company to drive a global leadership position in IoT services and solutions.”

The announcement comes alongside a second quarter earnings report from Sierra in which the company grew revenue by 11 percent to $173.5 million, net income by 842.9 percent from $700,000 last year to $6.6 million this year, and earnings per share by 900 percent to 20 cents. Sierra ended the quarter with no debt and $89 million in cash.

In the first quarter of this year, Numerex posted $16.4 million in net revenue, putting it on pace for annualized revenue of around $66 million.