Ericsson (NASDAQ: ERIC) has acquired Cradlepoint – a US-based provider of wireless edge WAN 4G and 5G enterprise solutions. The investment would be key to Ericsson’s ongoing strategy of capturing market share in the rapidly expanding 5G Enterprise space.
Founded in 2006, Cradlepoint has more than 650 employees, providing wireless WAN solutions that deliver enterprise-grade connectivity. Cradlepoint’s subscription model combines cloud-delivered software with hardware endpoints, support and training.
In addition to the company headquarters in Boise, Idaho, USA, the company operates a research and development center in Silicon Valley, California. It also has newly opened market offices in the United Kingdom and Australia.
Cradlepoint complements Ericsson’s existing 5G Enterprise portfolio which includes dedicated networks and a global IoT platform. The combined offering would create new revenue streams for customers by supporting full 5G-enabled services for enterprise, and boost returns on investments in the network.
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 become part of Ericsson’s Business Area Technologies & New Businesses.
The purchase price of $1.1 billion, which is funded from Ericsson’s cash-in-hand, is paid in full on closing. Cradlepoint’s sales for 2019 were SEK 1.2 billion (around $137M), with a gross margin of 61%.
WAN Edge Solutions
Wireless wide area network (wireless WAN) Edge solutions can connect through 4G and 5G to deliver “fast, secured, and flexible” connectivity wherever and whenever it is needed. It’s aimed at businesses, mobility and critical frontline emergency services. Cradlepoint would be strongly positioned in a market with underlying growth of “25-30%”.
“Portfolio-near acquisitions are an integral part of our earlier communicated strategy,” said Börje Ekholm, President and CEO of Ericsson. “The acquisition of Cradlepoint complements our existing offerings and is key to our strategy of helping customers grow the value of their 5G network investments. Ericsson is uniquely positioned to build on Cradlepoint’s leadership position in Wireless Edge and the wireless WAN market. Combining the scale of our market access and established relationships with the world’s biggest mobile operators we are making a strong investment to support our customers to grow in this exciting market. I would like to extend a very warm welcome to all Cradlepoint employees.”
Ericsson’s long-standing collaboration with Cradlepoint dates back to the launch of 4G in the U.S. market more than a decade ago.
“We have led the way in bringing the power of cellular networks and technologies to enterprise and public sector customers – helping them connect beyond the limits of traditional wired WANs,” said George Mulhern, CEO and chairman of Cradlepoint. “Ericsson with its global 5G leadership is a great match for us and I am very excited to continue to scale and expand our business together.”