Ericsson Buys Cradlepoint

Ericsson is to buy Cradlepoint, the US Wireless Edge WAN 4G and 5G Enterprise specialist, in a deal with an enterprise value of $1.1 billion.

The investment  is aimed at increasing market share in the 5G Enterprise market.

Cradlepoint’s sales for 2019 were $137 million with a gross margin of 61%. Ericsson’s operating margins are expected to be negatively impacted by approximately 1% in 2021 and 2022 – where half is related to amortization of intangible assets which arise from the acquisition.

Cradlepoint is expected to contribute to operating cash-flow starting in 2022.

WAN Edge networks connect through 4G and 5G.  Cradlepoint has underlying WAN Edge market growth of 25-30%.

Founded in 2006, Cradlepoint has more than 650 employees. Thev company HQ is in Boise, Idaho, and it operates an R&D centre in Silicon Valley, California, and market offices in the UK and Australia.

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