Ericsson seals $1B Cradlepoint buy - Mobile World Live

Ericsson seals $1B Cradlepoint buy

03 NOV 2020

Ericsson completed an acquisition of US-based wireless solutions specialist Cradlepoint, more than a month after it first announced the proposed $1 billion deal tie-up.

The Swedish vendor stated it paid the sum using its cash-in-hand, with the final figure slightly less than the enterprise value of $1.1 billion it said it would pay when first announcing the deal.

Ericsson explained its operating margins are expected to be negatively impacted by approximately 1 per cent in 2021 and 2022, half related to amortisation of intangible assets arising from the acquisition. Cradlepoint is expected to contribute to operating cash flow starting in 2022.

As explained when first announced, Ericsson struck the deal to help it capture a bigger share of the 5G enterprise market, tapping Cradlepoint’s systems to help companies connect sites, vehicles, mobile workforces and IoT devices using cellular technology.

Ericsson expects to create new revenue streams in areas including 5G-enabled enterprise services, and boost RoI in its network.

Cradlepoint will operate as a standalone subsidiary within Ericsson, joining its Business Area Technologies and New Businesses division.

Head of the division Asa Tamsons said with Cradlepoint’s technologies, Ericsson is “strengthening our offering and taking an important step to lead the next wave of enterprise network transformation”.

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Kavit Majithia

Kavit joined Mobile World Live in May 2015 as Content Editor. He started his journalism career at the Press Association before joining Euromoney’s graduate scheme in April 2010. Read More >>

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