On Friday, Swedish telecoms giant Ericsson said, it has agreed to acquire U.S.-based wireless networking company Cradlepoint in a $1.1 billion deal.

The deal is Ericsson’s largest acquisition in more than a decade. The acquisition will provide Ericsson access to tools that can connect devices using Internet of Things (IoT) over a 4G or 5G networks.

The deal, expected to close by this year end, is likely to take a 1$ hit in Ericsson’s operating margins in 2021 and 2022; it will start contributing to its operating cash flow starting in 2022.

Ericsson has left its 2022 group financial targets unchanged.

Following the acquisition, Cradlepoint will become a subsidiary of Ericsson.

Founded in 2006, it has more than 650 employees, provides subscription-based wireless networking software and hardware to businesses. In 2019, it had sales of $137 million (1.2 billion crowns), with a gross margin of 61%.

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