Ericsson completed its previously-announced acquisition of Cradlepoint for approximately US$1 billion.
Cradlepoint will operate as a stand-alone subsidiary within Ericsson and continue to build on the current market momentum as 5G is speeding up digital transformation and increasing the need for advanced connectivity services for enterprises. Cradlepoint will be part of Ericsson’s Business Area Technologies & New Businesses.
Ericsson acquires Cradlepoint for $1.1 billion
Ericsson has acquired privately-held Cradlepoint, a provider of Wireless Edge WAN 4G and 5G Enterprise solutions, for US$1.1 billion.
Cradlepoint operates a subscription-based cloud platform that uses wireless edge routers designed to connect fixed and mobile sites, vehicles, field forces, and loT devices over LTE and 5G. The service hepls enterprises connect branch, mobile and IoT endpoints on one WAN. Cradlepoint, which is based in Boise, Idaho, will become a fully owned subsidiary of Ericsson while continuing to operate under its existing brand and be part of Ericsson’s Business Area Technologies & New Businesses. Cradlepoint currently has more than 650 employees. The company was founded in 2006. In addition to its headquarters in Boise, the company operates a research and development center in Silicon Valley, California, and new market offices in the United Kingdom and Australia.
Ericsson said the acquisition advances its ongoing mission to capture 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.
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 amortization 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.
