Ericsson (Nasdaq: ERIC) has agreed to acquire CradlePoint, the US-based market leader in wireless edge WAN 4G and 5G enterprise solutions. The key to Ericsson’s ongoing strategy is to capture market share in the rapidly growing 5G enterprise space. Cradlepoint complements Ericsson’s existing 5G enterprise portfolio, which includes dedicated networks and the global IoT platform.
The combined offer will generate valuable new revenue streams for customers by supporting fully 5G-enabled services for the enterprise and accelerating returns on investment in the network.
Cradlepoint will become a wholly owned subsidiary of Ericsson as it continues to operate under the existing brand. Cradlepoint employees will be within the company, headquartered in Boise, Idaho. It will be part of Ericsson’s business sector technologies and new businesses.
The acquisition price is equal to the enterprise value of 1 1.1 BS. The transaction is expected to close before the end of Q42020, subject to closing conditions. The purchase price, funded by Ericsson’s cash-in-hand, is paid in full upon closing. Cradlepoint’s sales for 2019 were SEK 1.2 b. With a total margin of 61%. Ericsson’s operating margins are expected to be negatively affected by about 1% in 2021 and 2022 – where half of the acquisitions relate to intangible assets or redemption. Cradlepoint is expected to contribute to the management of cash flow starting from 2022. Ericsson’s 2022 Group financial targets remain unchanged.
Wireless Wide Area Network (Wireless WN) Edge Solutions connects via 4G and 5G to deliver fast, secure and flexible connectivity wherever and whenever it is needed for businesses, mobility and complex frontline emergency services. Cradlepoint is in a strong position in the market with an underlying growth of 25-30%.
“Portfolio-close acquisitions are an integral part of our previous communications strategy. The acquisition of CradlePoint complements our current offer fur and our strategy is to help customers increase the value of their 5G network investments,” says Ericsson, President and CEO. And uniquely positioned to create CradlePoint’s leading position in the wireless WN market.We combine our market access access and established relationships with the world’s largest mobile operators We are making strong investments to support our customers to develop this exciting market. A very warm welcome. “
George Malharn, CEO and Chairman of Cradlepoint, says: “We have taken the power of cellular networks and technology toward enterprise and public sector customers – helping them connect beyond the confines of traditional wired WANs. Ericsson is a great match for us with its global 5G leadership and I am very excited to continue to scale and expand our business as well. ”
Founded in 2006, CradlePoint has more than 650 employees, providing wireless WAN solutions that deliver enterprise-grade connectivity. In addition to the company’s headquarters in Boise, Idaho, USA, the company operates a research and development center in Silicon Valley, California, and new market offices in the United Kingdom and Australia.
CradlePoint’s subscription model combines cloud-distributed software with hardware endpoints, support and training.
Ericsson’s long-standing collaboration with Cradlepoint The market has a 4G launch date of more than a decade ago.
Invitation to Media and Analyst Call
The company will call a conference call for journalists, financial analysts and investors. Barge Echom, President and CEO, Carl Malander, Chief Financial Officer Fischer, and Essa Tammons, Head of Business Area Technol Geez and New Businesses, will comment shortly and take questions.
The conference will be held on September 18, 9:00 AM CEST. (8:00 AM GMT in London and 3:00 AM EST in New York).
To join a conference call, please call one of the following numbers:
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The live audio of the conference call will be available on the webcast at www.ericsson.com/investors and the newsroom at www.ericsson.com
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A replay of the conference call will be received by September 24, 2020, approximately one hour after the end of the conference call.
Sweden Replay Number: +46 (0) 8 519 993 85
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US Replay Number: +1 (866) 931 1566
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About an hour after the webcast ends, the on-demand webcast will be available at www.ericsson.com/investors and www.ericsson.com/newsroom.
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About Ericsson
Ericsson enables telecommunications service providers to get the full value of connectivity. The company’s portfolio spans networks, digital services, managed services and emerging businesses and is designed to help our customers go digital, increase efficiency and find new revenue streams. Ericsson’s investments in innovation have brought the benefits of telephony and mobile broadband to billions of people around the world. Ericsson stock is listed on Nasdaq Stockholm and Nasdaq New York. www.ericsson.com
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