Ericsson buys Cradlepoint for $1.1 billion
Transaction expected to close during the fourth quarter, subject to merger clearance and other closing conditions
Stocks impacted: Ericsson (ERIC)
Ericsson has agreed to buy U.S.-based wireless networking company Cradlepoint in a $1.1 billion deal on an enterprise-value basis. Transaction expected to close during the fourth quarter, subject to merger clearance and other closing conditions. The deal would give it access to tools that can connect devices using Internet of Things over a 4G or a 5G network. CradlePoint will continue to operate under its own brand, as a fully owned subsidiary of Ericsson. Ericsson said its operating margins “are expected to be negatively impacted by approximately 1% in 2021 and 2022”. Cradlepoint's sales for 2019 were $136.1 million and it had a gross margin of 61%. Ericsson said its 2022 group financial targets remained unchanged.
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