Ericsson has completed its acquisition of Cradlepoint, the US-based wireless WAN Edge 4G and 5G solutions provider for the enterprise market, for around $1 billion.
The investment is key to Ericsson’s ongoing strategy of capturing market share in the rapidly expanding 5G enterprise space.
Cradlepoint’s sales for 2019 were SEK 1.2 billion with a gross margin of 61 percent. Ericsson’s operating margins are expected to be negatively impacted by approximately 1 percent in 2021 and 2022 – where half is related to amortization of intangible assets arising from the acquisition. Cradlepoint is expected to contribute to operating cash-flow starting in 2022.
Customers use Cradlepoint’s solutions to connect sites, vehicles, mobile workforces, and IoT devices using cellular technology. Ericsson can create new revenue by supporting 5G-enabled services for enterprise, and boost returns on investments in the network.
Cradlepoint will operate as a stand-alone subsidiary within Ericsson and continue to build on the current market momentum as 5G is speeding up digital transformation and increasing the need for advanced connectivity services for enterprises.
“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,”Asa Tamsons, head of Business Area Technologies & New Businesses, Ericsson, said.
Cradlepoint will continue to be headquartered in Boise, Idaho, USA. Cradlepoint operates a research and development center in Silicon Valley, California, and international offices in the United Kingdom and Australia.
