Ericsson is buying US-based Cradlepoint, a vendor of Wireless Edge WAN 4G and 5G Enterprise solutions, for an enterprise value of $1.1 billion.
Founded in 2006, Cradlepoint has around 650 employees, and provides wireless WAN solutions that deliver enterprise-grade connectivity. Its subscription model combines cloud-delivered software with hardware endpoints, support and training. Its relationship with Ericsson in the US goes back over a decade ago.
Upon acquisition, Cradlepoint will become a fully-owned subsidiary of Ericsson, operating within Ericsson’s Business Area Technologies & New Businesses division, while continuing to use its existing brandname. The company’s employees will remain within the company, headquartered in Boise, Idaho, the company’s R&D centre in Silicon Valley, California, and its offices in the UK and Australia.
Wireless wide area network (wireless WAN) Edge solutions like the one developed by Cradlepoint connect through 4G and 5G to deliver fast, secure and flexible connectivity wherever and whenever it is needed for businesses, mobility and critical frontline emergency services. Ericsson says the investment is part of its strategy to rapidly grow its 5G enterprise market space, with its new acquisition complementing its existing 5G enterprise portfolio.
Cradlepoint’s sales for 2019 were around $137 million (SEK1.2 billion), with a gross margin of 61% and underlying growth of 25-30%. The transaction is expected to close by end of Q4 2020, subject to merger clearance and other closing conditions.
