The Stockholm-based network and
telecommunication company, Ericsson, announced
today the purchase of a US-based company specialized in wireless internet
connectivity products, #Cradlepoint.
The deal, expected to close before the end
of the fourth quarter of 2020, is valued at $1.1 billion, and will be paid in
full by Ericsson on closing. Through it, Ericsson is looking to expand its 5G
footprint, and from its point of view, Cradlepoint is “strongly positioned” in
the market, given that it started providing 4G services in the States more than
a decade ago.
Cradlepoint, headquartered in Boise, Idaho,
was founded in 2006, and until now, it has over 650 employees in Silicon
Valley, and at their UK and Australia market offices. In 2019, its sales were
of $136.1 million, and gross margin was of 61%. Cradlepoint will operate under
its brand, but it will be considered a wholly owned Ericsson subsidiary. Also,
it will start to contribute to operating cash-flow in 2022.
Ericsson, Nokia, and Huawei are the
top companies involved in the race of who can deliver 5G technology faster, the
same #5G technology that's been subject to political disputes.
Following the news, Ericsson share price
closed 1.47% higher. During today’s pre-market session, it gained more than
2.20%.
Sources: marketwatch.com, Bloomberg.com
