STOCKHOLM, Sept. 18, 2020 /PRNewswire/ -- Ericsson (NASDAQ:
ERIC) has agreed to acquire Cradlepoint, the US-based market leader
in Wireless Edge WAN 4G and 5G Enterprise solutions. The investment
is key to Ericsson's ongoing strategy of capturing market share in
the rapidly expanding 5G Enterprise space. Cradlepoint complements
Ericsson's existing 5G Enterprise portfolio which includes
Dedicated Networks and a global IoT platform.
The combined offering will create valuable new revenue streams
for customers by supporting full 5G-enabled services for
enterprise, and boost returns on investments in the network.
Cradlepoint will become a fully owned subsidiary of Ericsson
while continuing to operate under its existing brand. Cradlepoint
employees will remain within the company, headquartered in
Boise, Idaho. It will be part of
Ericsson's Business Area Technologies & New Businesses.
The acquisition price amounts to an enterprise value of
USD 1.1 b. with the transaction
expected to close before the end of Q4 2020, subject to closing
conditions. The purchase price, which is funded from Ericsson's
cash-in-hand, is paid in full on closing. Cradlepoint's sales for
2019 were SEK 1.2 b. with a gross
margin of 61%. Ericsson's operating margins are expected to be
negatively impacted by approximately 1% in 2021 and 2022 - where
half is related to amortization of intangible assets which arise
from the acquisition. Cradlepoint is expected to contribute to
operating cash-flow starting in 2022. Ericsson's 2022 group
financial targets remain unchanged.
Wireless wide area network (wireless WAN) Edge solutions connect
through 4G and 5G to deliver fast, secure, and flexible
connectivity wherever and whenever it is needed for businesses,
mobility and critical frontline emergency services. Cradlepoint is
strongly positioned in a market with underlying growth of
25-30%.
Börje Ekholm, President and CEO Ericsson, says: "Portfolio-near
acquisitions are an integral part of our earlier communicated
strategy. 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. Ericsson is uniquely
positioned to build on Cradlepoint's leadership position in
Wireless Edge and the wireless WAN market. Combining the scale of
our market access and established relationships with the world's
biggest mobile operators we are making a strong investment to
support our customers to grow in this exciting market. I would like
to extend a very warm welcome to all Cradlepoint employees."
George Mulhern, CEO and Chairman,
Cradlepoint says: "We have led the way in bringing the power of
cellular networks and technologies to enterprise and public sector
customers - helping them connect beyond the limits of traditional
wired WANs. Ericsson with its global 5G leadership is a great match
for us and I am very excited to continue to scale and expand our
business together."
Founded in 2006, Cradlepoint has more than 650 employees,
providing wireless WAN solutions that deliver enterprise-grade
connectivity. In addition to the company 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-delivered
software with hardware endpoints, support and training.
Ericsson's long-standing collaboration with Cradlepoint dates
back to the launch of 4G in the U.S. market more than a decade
ago.
INVITATION TO MEDIA AND ANALYST CALL
The company will hold a conference call for journalists,
financial analysts and investors. Börje Ekholm, President and CEO,
Carl Mellander, Chief Financial
Officer, and Åsa Tamsons, Head of Business Area Technologies &
New Businesses, will make brief comments and take questions.
The conference call will begin September
18, at 9:00 AM CEST
(8:00 AM GMT in London and 3:00 AM
EST in New York).
To join the conference call, please phone one of the following
numbers:
Sweden: +46 (0)8 566 42651
(Toll-free Sweden: 0200 883
685)
International/UK: +44 (0)333 300 0804 (Toll-free
International/UK: 0800 358 9473)
US: +1 631 913 1422 (Toll-free US: +1 855 857 0686)
PIN code: 38166079#
A live audio webcast of the conference call will be available at
www.ericsson.com/investors and www.ericsson.com/newsroom
Replay:
A replay of the conference call will be available from about one
hour after the conference call has ended until September 24, 2020.
Sweden replay number: +46 (0) 8
519 993 85
International/UK replay number: +44 (0) 333 300 0819
US replay number: +1 (866) 931 1566
PIN code replay: 301331532#
An on-demand webcast will be available at
www.ericsson.com/investors and www.ericsson.com/newsroom
approximately one hour after the webcast ended.
NOTES TO EDITORS:
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MORE INFORMATION AT:
Ericsson Newsroom
FOR FURTHER INFORMATION, PLEASE CONTACT
Contact person
Peter Nyquist, Head of Investor
Relations
Phone: +46 705 75 29 06
E-mail: peter.nyquist@ericsson.com
Additional contact
Stella Medlicott, Senior Vice
President, Marketing and Corporate Relations
Phone: +46 730 95 65 39
E-mail: media.relations@ericsson.com
Investors
Stefan Jelvin, Director, Investor Relations
Phone: +46 709 86 02 27
E-mail: stefan.jelvin@ericsson.com
Media
Peter Olofsson, Head of Corporate
Communications
Phone: +46 702 67 34 45
E-mail: media.relations@ericsson.com
Corporate Communications
Phone: +46 10 719 69 92
E-mail: media.relations@ericsson.com
About Ericsson
Ericsson enables communications service providers to capture the
full value of connectivity. The company's portfolio spans Networks,
Digital Services, Managed Services, and Emerging Business and is
designed to help our customers go digital, increase efficiency and
find new revenue streams. Ericsson's investments in innovation have
delivered the benefits of telephony and mobile broadband to
billions of people around the world. The Ericsson stock is listed
on Nasdaq Stockholm and on Nasdaq New York. www.ericsson.com
Forward-looking statements
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statements reflecting management's current views relating to the
growth of the market, future market conditions, future events,
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Ericsson accelerates
5G for Enterprise with acquisition of Cradlepoint
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SOURCE Ericsson