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Ericsson to buy wireless networking firm Cradlepoint in $1.1 bln deal

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Ericsson has agreed to buy U.S.-based wireless networking company Cradlepoint in a $1.1 billion deal, the Swedish telecoms gear maker said on Friday.

Adds details, background

STOCKHOLM, Sept 18 (Reuters) - Ericsson ERICb.ST has agreed to buy U.S.-based wireless networking company Cradlepoint in a $1.1 billion deal, the Swedish telecoms gear maker said on Friday.

The deal, Ericsson's largest in more than a decade, would give it access to tools that can connect devices using Internet of Things over a 4G or a 5G network.

The transaction, expected to close before the end of this year, will hurt Ericsson's operating margins by about 1% in 2021 and 2022, and contribute to operating cash flow starting in 2022.

Ericsson said its 2022 group financial targets remained unchanged.

Cradlepoint, which will become a subsidiary of Ericsson, was founded in 2006, has more than 650 employees, and provides subscription-based wireless networking software and hardware to businesses.

It had sales of 1.2 billion crowns ($137 million) in 2019, with a gross margin of 61%.

(Reporting by Helena Soderpalm and Supantha Mukherjee, Editing by Sherry Jacob-Phillips and Tomasz Janowski)

((helena.soderpalm@thomsonreuters.com; +46 8 700 10 15; Reuters Messaging: helena.soderpalm.reuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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