Ericsson Buys Cradlepoint in $1.1 Billion Deal
September 18 2020 - 2:48AM
Dow Jones News
By Dominic Chopping
STOCKHOLM--Ericsson AB on Friday announced the acquisition of
Cradlepoint, a U.S.-based provider of wireless internet
connectivity products, for an enterprise value of $1.1 billion.
"The acquisition of Cradlepoint complements our existing
offerings and is key to our strategy of helping customers grow the
value of their 5G network investments," said Ericsson Chief
Executive Borje Ekholm.
Cradlepoint's wireless wide area network Edge solutions connect
through 4G and 5G to deliver internet connectivity wherever it is
needed for businesses, mobility and critical frontline emergency
services. Ericsson said the deal is key to its continuing strategy
of capturing market share in the rapidly expanding 5G enterprise
space.
The purchase price, funded from Ericsson's cash-in-hand, will be
paid in full on closing, which is expected before the end of the
fourth quarter 2020.
Founded in 2006, Cradlepoint has over 650 employees between its
headquarters in Boise, Idaho, a research and development center in
Silicon Valley, California, and market offices in the U.K. and
Australia.
Cradlepoint's sales for 2019 were 1.2 billion Swedish kronor
($136.1 million) and it had a gross margin of 61%. Ericsson's
operating margins are expected to be negatively impacted by
approximately 1% in 2021 and 2022, but Cradlepoint is expected to
contribute to operating cash-flow starting in 2022.
Ericsson's 2022 group financial targets remain unchanged.
Write to Dominic Chopping at dominic.chopping@wsj.com
(END) Dow Jones Newswires
September 18, 2020 02:33 ET (06:33 GMT)
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