Ericsson Accelerates 5G for Business with Acquisition of Cradlepoint

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Ericsson (NASDAQ: ERIC) has agreed to acquire Cradlepoint, the US market leader in Wireless Edge WAN 4G and 5G Enterprise solutions. This investment is critical to Ericsson’s continued strategy to capture market share in the growing 5G enterprise space. Cradlepoint complements Ericsson’s existing 5G enterprise portfolio, which includes dedicated networks and a global IoT platform.

The combined offering will create valuable new revenue streams for customers by supporting full 5G-enabled business services and increase return on investment in the network.

Cradlepoint will become a wholly owned subsidiary of Ericsson while continuing to operate under its existing brand. Cradlepoint employees will remain with the company, which is headquartered in Boise, Idaho. It will be part of Ericsson’s Technologies and New Enterprises business area.

The purchase price amounts to an enterprise value of 1.1b USD. the transaction is expected to close before the end of the fourth quarter of 2020, subject to closing conditions. The purchase price, which is funded from Ericsson’s cash, is paid in full at closing. Cradlepoint’s sales for 2019 were SEK 1.2 billion. with a gross margin of 61%. Ericsson’s operating margins are expected to be negatively impacted by around 1% in 2021 and 2022 – half of which relates to the amortization of intangible assets resulting from the acquisition. Cradlepoint is expected to contribute to operating cash flow from 2022. The Ericsson group’s financial targets for 2022 remain unchanged.

Wireless Wide Area Network (Wireless WAN) Edge solutions connect via 4G and 5G to deliver fast, secure, and flexible connectivity where and when it’s needed for business, mobility and critical frontline emergency services . Cradlepoint is strongly positioned in a market with underlying growth of 25-30%.

Börje Ekholm, President and CEO of Ericsson, said: “Close portfolio acquisitions are an integral part of our previously communicated strategy. The acquisition of Cradlepoint complements our existing offerings and is key to our strategy to help customers increase the value of their investments in the 5G network. . Ericsson is uniquely positioned to build on Cradlepoint’s leadership position in Wireless Edge and the wireless WAN market. By combining the breadth of our market access and established relationships with the world’s largest mobile operators, we are investing heavily to help our customers grow in this area. exciting market. I extend a very warm welcome to all Cradlepoint employees.

George Mulhern, CEO and President of Cradlepoint, said: “We have led the way in bringing the power of cellular networks and technologies to businesses and public sector customers, helping them connect beyond the limits of wired WANs. traditional. Ericsson, with its global leadership in 5G, is a great partner for us and I am very happy to continue to evolve and grow our business together. “

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

Cradlepoint’s subscription model combines cloud-delivered software with hardware endpoints, support, and training.

Ericsson’s long-standing collaboration with Cradlepoint dates back to the launch of 4G in the US market over a decade ago.

MEDIA INVITATION AND ANALYST CALL

The company will host a conference call for journalists, financial analysts and investors. Börje Ekholm, President and CEO, Carl Mellander, CFO, and Åsa Tamsons, Head of Industry Technology and New Businesses, will make brief comments and answer questions.

The conference call will begin on September 18 at 9:00 a.m. CEST (8:00 a.m. GMT in London and 3:00 a.m. EST in New York).

To join the conference call, please call one of the following numbers:

Sweden: +46 (0) 8566 42651 (Free call Sweden: 0200883685)

International / United Kingdom: +44 (0) 333 300 0804 (Free Call International / United Kingdom: 0800 358 9473)

USA: +1 631 913 1422 (USA Toll Free: +1 855 857 0686)

Code PIN: 38166079 #

A live audio webcast of the conference call will be available at www.ericsson.com/investors and www.ericsson.com/newsroom

Replay:

A replay of the conference call will be available approximately one hour after the end of the conference call until September 24, 2020.

Replay number Sweden: +46 (0) 8519993 85

International / UK rebroadcast number: +44 (0) 333 300 0819

Replay number in the United States: +1 (866) 931 1566

PIN code reading: 301331532 #

An on-demand webcast will be available at www.ericsson.com/investors and www.ericsson.com/newsroom approximately one hour after the webcast ends.

NOTES TO EDITORS:

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About Ericsson
Ericsson empowers communications service providers to capture the full value of connectivity. The company’s portfolio spans networks, digital services, managed services and emerging businesses and is designed to help our clients go digital, increase efficiency and find new revenue streams. Ericsson’s investments in innovation have brought the benefits of telephony and mobile broadband to billions of people around the world. Ericsson shares are listed on Nasdaq Stockholm and Nasdaq New York. www.ericsson.com

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