Ericsson is set to acquire Vonage for $6.2bn to fuel its development of a global communication network.
The acquisition has already been approved by Vonage’s board and is scheduled to be completed in the first half of 2022, providing it receives regulatory approval and support from Vonage shareholders.
Börje Ekholm, President and CEO of Ericsson, said: “The core of our strategy is to build leading mobile networks through technology leadership. This provides the foundation to build an enterprise business.
“The acquisition of Vonage is the next step in delivering on that strategic priority. Vonage gives us a platform to help our customers monetize the investments in the network, benefitting developers and businesses”
“Imagine putting the power and capabilities of 5G, the biggest global innovation platform, at the fingertips of developers. Then back it with Vonage’s advanced capabilities, in a world of eight billion connected devices. Today we are making that possible.”
#NEWS of today! Excited to share our intent to make @Vonage part of the @ericsson family.
Together we can do amazing things benefitting our customers, businesses and developers. More details in the press release 👇https://t.co/SscA6ndqnk#ImaginePossible pic.twitter.com/mBKs1m5VFP
— Börje Ekholm (@Borje_Ekholm) November 22, 2021
Ericsson said the rationale behind the deal is to combine its 4G and 5G capabilities with the Vonage Communications Platform and CPaaS credentials.
The acquisition follows the firm’s $1.1bn of Cradlepoint last year.
Vonage hit revenue of $1.4bn during the 12-month period ending 30 September.
Rory Read, CEO of Vonage, said: “Ericsson and Vonage have a shared ambition to accelerate our long-term growth strategy.
“The convergence of the internet, mobility, the cloud and powerful 5G networks are forming the digital transformation and intelligent communications wave, which is driving a secular change in the way businesses operate. The combination of our two companies offers exciting opportunities for customers, partners, developers and team members to capture this next wave.
“We believe joining Ericsson is in the best interests of our shareholders and is a testament to Vonage’s leadership position in business cloud communications, our innovative product portfolio, and outstanding team.”
Ericsson said that Vonage will retain its branding, with its employees remaining in place and Read joining the Ericsson board.
The firm is set to pay $21 per Vonage share – a 28 percent premium on the share price when stock exchange closed on Friday.
