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Ericsson to buy wireless networking firm Cradlepoint in US$1.1b deal
[STOCKHOLM] Ericsson has agreed to buy US-based wireless networking company Cradlepoint in a US$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 per cent 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 (S$185 million) in 2019, with a gross margin of 61 per cent.