Ericsson has agreed to buy Vonage Holdings Corp. in the US for an enterprise value of $6.2 billion (€5.50bn)as it strives to build market presence in cloud communications services.
The Swedish telecommunications group will pay $21 per share for Vonage using existing cash, according to a statement Monday. The offer represents an equity value of about $5.3 billion based on some 252 million shares outstanding.
Ericsson’s push into cloud-based services comes at a time as its earnings have been hampered by both lost business in China and component shortages from a global supply-chain squeeze. The company said on Monday that it remains fully committed to its long-term Ebita margin target of 15-18 per cent.
“Vonage gives us a platform to help our customers monetize the investments in the network, benefiting developers and businesses,” said Ericsson’s chief executive office Borje Ekholm.
The US company’s cloud-based communications platform accounts for 80 per cent of its $1.4 billion annual revenues and enables developers to embed services such as messaging or video into their products. That customer base and developer community is seen as a key draw for Ericsson.
Vonage itself had been under pressure from activist investor Jana Partners and was working with advisers to run a strategic review of the business. That review included the possibility of a full sale of the company, Bloomberg News reported in September. – Bloomberg
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November 22, 2021 at 02:40PM
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Ericsson agrees to buy Vonage Holdings Corp in US for $6.2bn - The Irish Times
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