Ericsson closes $1.1bn Cradlepoint acquisition

Telco giant claims acquisition will help it grab market share in 5G enterprise space

Ericsson has closed its acquisition of wireless edge vendor Cradlepoint as it looks to grab market share in the 5G enterprise space.

The $1.1bn all-cash acquisition was first announced in September and would see US-based Cradlepoint be acquired by the Swedish telco firm.

At the time Ericsson said the deal would close before the end of the year.

Cradlepoint produced revenues of SEK 1.2bn in 2019, claims Ericsson, and achieved gross margins of 61 per cent.

Ericsson claims that its own operating margins will be negatively affected by one per cent due to the acquisition, but expects Cradlepoint to contribute to its cash flow by 2022.

The Swedish telco claims the acquisition will enable it to create new revenue streams for its enterprise customers through supporting 5G services.

Meawhile, Ericsson claims its international footprint will help speed up Cradlepoint's own expansion into new territories.

The US vendor will continue to operate as a standalone subsidiary as part of Ericsson, forming part of its Business Area Technologies and New Business unit.

It will keep its headquarters in Boise, Idaho as well as its R&A centre in Silicon Valley and international offices in the UK and Australia.

In a statement Åsa Tamsons, SVP of Business Area Technologies and New Business at Ericsson, said: "I am very excited to welcome Cradlepoint to the Ericsson family. With Cradlepoint's market leading solutions, we are strengthening our enterprise offering and taking an important step to lead the next wave of enterprise network transformation. Together, we will power solutions to the customer edge that help improve productivity and deliver real-time services, enabling us to drive faster adoption of 5G in enterprise segments. This is good news for our customers as it helps them to accelerate their returns on 5G investments."