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Ericsson buys Cradlepoint

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Miguel A. Rodriguez
Miguel A. Rodriguez
18 September 2020
Ericsson expands in the US

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


This information/research prepared by Miguel A. Rodriguez does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. The research analyst primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views and consequently any person acting on it does so entirely at their own risk.The research provided does not constitute the views of KW Investments Ltd nor is it an invitation to invest with KW Investments Ltd. The research analyst also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report.The research analyst in not employed by KW Investments Ltd. You are encouraged to seek advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit that conforms to your specific investment objectives, financial situation, or particular financial needs before making a commitment to invest. The laws of the Republic of Seychelles shall govern any claim relating to or arising from the contents of the information/ research provided. 

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Miguel A. Rodriguez
Miguel A. Rodriguez
Financial Writer

Miguel worked for major financial institutions such as Banco Santander, and Banco Central-Hispano. He is a published author of currency trading books.