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Ericsson: Acquired US Vonage for $ 6.2 billion

Vonage was acquired by telecommunications equipment company Ericsson for $ 6.2 billion.

The deal is the largest the Swedish company has made in years and comes after the acquisition of the US wireless network company Cradlepoint for $ 1.1 billion in 2020. =

“The merger agreement was approved unanimously by Vonage’s board of directors,” Ericsson said in a statement.

“The agreement is based on Ericsson’s stated intention to expand its wireless operations worldwide, offering existing customers an increased stake in a $ 700 billion market by 2030.”

Vonage had sales of $ 1.4 billion in the 12-month period ending Sept. 30, with a 14% adjusted EBITDA margin and $ 109 million in cash flow.

The acquisition marks a new phase after the period from 2017 when Borje Ekholm took over as CEO.

It has focused on restructuring and reorienting businesses since Ericsson entered multimedia in the early 2000s.

It found it difficult to integrate its acquisitions into activities, affecting margins and profits.

Ericsson said it expects the deal to boost earnings per share and cash flow from 2024 onwards.

The agreement is expected to be completed in the first half of 2022, and is subject to the approval of Vonage shareholders, regulators and other conditions.

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Source From: Capital

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