Ericsson

Ericsson to acquire Cradlepoint to accelerate 5G for Enterprise

Ericsson acquires the market-leader for Wireless Edge WAN solutions for an enterprise value of USD 1.1 b.

Ericsson has agreed to acquire Cradlepoint, a US-based market leader in Wireless Edge WAN 4G and 5G Enterprise solutions. The investment is key to Ericsson’s ongoing strategy of capturing market share in the rapidly expanding 5G Enterprise space. Cradlepoint complements Ericsson’s existing 5G Enterprise portfolio which includes Dedicated Networks and a global IoT platform.

The combined offering will create valuable new revenue streams for customers by supporting full 5G-enabled services for enterprise, and boost returns on investments in the network.

Cradlepoint will become a fully owned subsidiary of Ericsson while continuing to operate under its existing brand. Cradlepoint employees will remain within the company, headquartered in Boise, Idaho. It will be part of Ericsson’s Business Area Technologies & New Businesses.

The acquisition price amounts to an enterprise value of USD 1.1 b. with the transaction expected to close before the end of Q4 2020, subject to closing conditions. The purchase price, which is funded from Ericsson’s cash-in-hand, is paid in full on closing.

Cradlepoint’s sales for 2019 were SEK 1.2 b. with a gross margin of 61%. Ericsson’s operating margins are expected to be negatively impacted by approximately 1% in 2021 and 2022 – where half is related to amortisation of intangible assets which arise from the acquisition.

Cradlepoint is expected to contribute to operating cash-flow starting in 2022. Ericsson’s 2022 group financial targets remain unchanged. 

Wireless wide area network (wireless WAN) Edge solutions connect through 4G and 5G to deliver fast, secure, and flexible connectivity wherever and whenever it is needed for businesses, mobility and critical frontline emergency services. Cradlepoint is strongly positioned in a market with underlying growth of 25-30%.

Börje Ekholm, President and CEO Ericsson, says:

“Portfolio-near acquisitions are an integral part of our earlier communicated strategy. The acquisition of Cradlepoint complements our existing offerings and is key to our strategy of helping customers grow the value of their 5G network investments. Ericsson is uniquely positioned to build on Cradlepoint’s leadership position in Wireless Edge and the wireless WAN market. Combining the scale of our market access and established relationships with the world’s biggest mobile operators we are making a strong investment to support our customers to grow in this exciting market. I would like to extend a very warm welcome to all Cradlepoint employees.”

Founded in 2006, Cradlepoint has more than 650 employees, providing wireless WAN solutions that deliver enterprise-grade connectivity. In addition to the company headquarters in Boise, Idaho, USA, the company operates a research and development centre in Silicon Valley, California, and new market offices in the United Kingdom and Australia.

Cradlepoint’s subscription model combines cloud-delivered software with hardware endpoints, support and training.

George Mulhern, CEO and Chairman, Cradlepoint says:

“We have led the way in bringing the power of cellular networks and technologies to enterprise and public sector customers – helping them connect beyond the limits of traditional wired WANs. Ericsson with its global 5G leadership is a great match for us and I am very excited to continue to scale and expand our business together.”

Ericsson’s long-standing collaboration with Cradlepoint dates back to the launch of 4G in the U.S. market more than a decade ago.

Conference Call

The company will hold a conference call for journalists, financial analysts and investors. Börje Ekholm, President and CEO, Carl Mellander, Chief Financial Officer, and Åsa Tamsons, Head of Business Area Technologies & New Businesses, will make brief comments and take questions.

The conference call will begin September 18, at 9:00 AM CEST (8:00 AM GMT in London and 3:00 AM EST in New York).

To join the conference call, please phone one of the following numbers:

  • Sweden: +46 (0)8 566 42651 (Toll-free Sweden: 0200 883 685)
  • International/UK: +44 (0)333 300 0804 (Toll-free International/UK: 0800 358 9473)
  • US: +1 631 913 1422 (Toll-free US: +1 855 857 0686)
  • PIN code: 38166079#

A live audio webcast of the conference call will be available here.

A replay of the conference call will be available from about one hour after the conference call has ended until September 24, 2020.

  • Sweden replay number: +46 (0) 8 519 993 85
  • International/UK replay number: +44 (0) 333 300 0819
  • US replay number:  +1 (866) 931 1566
  • PIN code replay: 301331532#

An on-demand webcast will be available here approximately one hour after the webcast ended.

Rapid Mobile

Rapid Mobile uses cookies, tokens, and other third party scripts to recognise visitors of our sites and services, remember your settings and privacy choices, and - depending on your settings and privacy choices - enable us and some key partners to collect information about you so that we can improve our services and deliver relevant ads.

 

By continuing to use our site or clicking I Accept, you agree that Rapid Mobile and our key partners may collect data and use cookies for personalised ads and other purposes, as described more fully in our privacy policy.

 

You can change your settings at any time by clicking Manage Settings or by visiting our Privacy Centre for more detailed information.

 

Privacy Settings saved!
Cookie Services

When you visit any website, it may store or retrieve information on your browser, mostly in the form of cookies.Because we respect your right to privacy, you can choose not to allow some types of cookies. Click on the different category headings to find out more and change our default settings. However, blocking some types of cookies may impact your experience of the site and the services we are able to offer.

These cookies allow us to count visits and traffic sources, so we can measure and improve the performance of our site.

We track anonymized user information to improve our website.
  • _ga
  • _gid
  • _gat

Decline all Services
Accept all Services