Ericsson to buy cloud firm Vonage for $6.2 billion By Reuters
© Reuters. FILE PHOTO: Ericsson logo is seen at its headquarters in Stockholm, Sweden June 14, 2018. REUTERS/Olof Swahnberg/File Photo
STOCKHOLM (Reuters) -Mobile telecoms equipment maker Ericsson (BS:) said on Monday it had agreed to buy cloud communications firm Vonage for $6.2 billion.
“The merger agreement was approved unanimously by the Board of Vonage,” Ericsson said in a statement.
“The transaction builds upon Ericsson’s stated intent to expand globally in wireless enterprise, offering existing customers an increased share of a market valued at $700 billion by 2030.”
Vonage had sales of $1.4 billion in the 12-month period to Sept. 30 2021 with a margin on adjusted earnings before interest, tax and depreciation (EBITDA) of 14% and free cash flow of $109 million.
The cloud-based Vonage Communications Platform serves over 120,000 customers and more than one million registered developers globally.
Ericsson said it expected the deal to boost earnings per share – excluding non-cash amortization impacts – and free cash flow from 2024 onwards.
The deal is expected to close in the first half of 2022, subject to Vonage shareholder approval, regulatory approvals, and other conditions.
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