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.
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.”
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.”
