Ericsson announced an agreement to acquire Cradlepoint for USD 1.1 billion. The takeover of the US-based company is expected to strengthen its portfolio of enterprise wireless solutions, including products for wireless edge WAN over 4G and 5G networks.
Cradlepoint will become a fully owned subsidiary of Ericsson while continuing to operate under its existing brand. Cradlepoint employees will remain within the company, headquartered in Boise, Idaho. It will be part of Ericsson’s Business Area Technologies & New Businesses.Ericsson will use cash on hand for the takeover and expects to close the acquisition before year-end. Cradlepoint generated revenues of SEK 1.2 billion in 2019 with a gross margin of 61 percent. Ericsson said the takeover will depress operating margins by around 1 percent in 2021 and 2022, of which about half comes from amortization of intangible assets, but the company still expects to meet its financial targets for 2022. Cradlepoint is expected to contribute to operating cash-flow starting in 2022.
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, the company operates a research and development centre in Silicon Valley, California, and new market offices in the UK and Australia.
Cradlepoint’s subscription model combines cloud-delivered software with hardware endpoints, support and training. Ericsson has collaborated with the company for over a decade, going back to the launch of 4G in the US.
