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Published on 18/09/2020 12:14:49 PM | Source: Reuters

Ericsson to buy wireless networking firm Cradlepoint in $1.1 billion deal

Posted in Top Stories| #World Market #US

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STOCKHOLM  - Ericsson has agreed to buy U.S.-based wireless networking company Cradlepoint in a $1.1 billion deal, the Swedish telecoms gear maker said on Friday.

The deal, Ericsson's largest in more than a decade, would give it access to tools that can connect devices using Internet of Things over a 4G or a 5G network.

The transaction, expected to close before the end of this year, will hurt Ericsson's operating margins by about 1% in 2021 and 2022, and contribute to operating cash flow starting in 2022.

Ericsson said its 2022 group financial targets remained unchanged.

Cradlepoint, which will become a subsidiary of Ericsson, was founded in 2006, has more than 650 employees, and provides subscription-based wireless networking software and hardware to businesses.

It had sales of 1.2 billion crowns ($137 million) in 2019, with a gross margin of 61%.

 

(Reporting by Helena Soderpalm and Supantha Mukherjee, Editing by Sherry Jacob-Phillips and Tomasz Janowski)