- Strengthens enterprise offering and creates valuable new
revenue streams for customers
- Welcomes more than 700 employees to Ericsson
- Cradlepoint to continue to operate under its existing
brand
STOCKHOLM, Nov. 2, 2020 /PRNewswire/ -- Ericsson (NASDAQ:
ERIC) has completed its acquisition of Cradlepoint, the US-based
market leader in Wireless WAN Edge 4G and 5G solutions for the
enterprise market. The investment is key to Ericsson's ongoing
strategy of capturing market share in the rapidly expanding 5G
enterprise space.
Closing of the acquisition follows the announcement on
September 18, 2020 of Ericsson's
intention to acquire Cradlepoint. At closing, a consideration of
around USD 1 b. was paid using
Ericsson's cash-in-hand. 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 arising from the
acquisition. Cradlepoint is expected to contribute to operating
cash-flow starting in 2022.
Through Cradlepoint's solutions, companies can connect sites,
vehicles, mobile workforces, and IoT devices in a simple and secure
way using cellular technology. By leveraging the combined offering,
Ericsson will be able to create valuable new revenue streams for
its customers by supporting 5G-enabled services for enterprise, and
boost returns on investments in the network. Ericsson's global
presence and long-standing relationships with the world's leading
service providers will also help accelerate Cradlepoint's
international expansion.
Cradlepoint will operate as a stand-alone subsidiary within
Ericsson and continue to build on the current market momentum as 5G
is speeding up digital transformation and increasing the need for
advanced connectivity services for enterprises. Cradlepoint will be
part of Ericsson's Business Area Technologies & New
Businesses.
Åsa Tamsons, Senior Vice President and Head of Business Area
Technologies & New Businesses, says: "I am very excited to
welcome Cradlepoint to the Ericsson family. With Cradlepoint's
market leading solutions, we are strengthening our enterprise
offering and taking an important step to lead the next wave of
enterprise network transformation. Together, we will power
solutions to the customer edge that help improve productivity and
deliver real-time services, enabling us to drive faster adoption of
5G in enterprise segments. This is good news for our customers as
it helps them to accelerate their returns on 5G investments."
Cradlepoint will continue to be headquartered in Boise, Idaho, USA. In addition to the company
headquarters, Cradlepoint operates a research and development
center in Silicon Valley, California, and international offices in the
United Kingdom and Australia.
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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
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Ericsson completes
acquisition of Cradlepoint
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