Ericsson Acquires Cradlepoint For an Enterprise Value of USD 1.1 Billion

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Cradlepoint provides wireless WAN solutions that deliver enterprise-grade connectivity. Cradlepoint’s subscription model combines cloud-delivered software with hardware endpoints, support and training

Ericsson has agreed to acquire Cradlepoint, the US-based market leader in Wireless Edge WAN 4G and 5G Enterprise solutions. The investment, as the company noted, is key to Ericsson’s ongoing strategy of capturing market share in the rapidly expanding 5G Enterprise space.

“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,” noted Börje Ekholm, President and CEO Ericsson.

Ericsson’s long-standing collaboration with Cradlepoint dates back to the launch of 4G in the U.S. market more than a decade ago.

Enterprise value of USD 1.1 billion

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The acquisition price amounts to an enterprise value of USD 1.1 billion. The transaction is expected to close before the end of Q4 2020, subject to closing conditions. The purchase price, which is funded from Ericsson’s cash-in-hand, is paid in full on closing.

Cradlepoint’s sales for 2019 were SEK 1.2 billion. The company had reported a gross margin of 61 per cent. Ericsson’s operating margins are expected to be negatively impacted by approximately one per cent 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.

Founded in 2006, Cradlepoint has more than 650 employees, providing wireless WAN solutions that deliver enterprise-grade connectivity. In addition to the company headquarters in Boise, Idaho, USA, the company operates a research and development center in Silicon Valley, California, and new market offices in the United Kingdom and Australia.

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.”

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