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%.