STOCKHOLM (Reuters) -Mobile telecoms equipment maker Ericsson said on Monday it had agreed to buy cloud communications firm Vonage for $6.2 billion.
“The merger agreement was approved unanimously by the Board of Vonage,” Ericsson said in a statement.
“The transaction builds upon Ericsson’s stated intent to expand globally in wireless enterprise, offering existing customers an increased share of a market valued at $700 billion by 2030.”
Vonage had sales of $1.4 billion in the 12-month period to Sept. 30 2021 with a margin on adjusted earnings before interest, tax and depreciation (EBITDA) of 14% and free cash flow of $109 million.
The cloud-based Vonage Communications Platform serves over 120,000 customers and more than one million registered developers globally.
Ericsson said it expected the deal to boost earnings per share – excluding non-cash amortization impacts – and free cash flow from 2024 onwards.
The deal is expected to close in the first half of 2022, subject to Vonage shareholder approval, regulatory approvals, and other conditions.
(Reporting by Simon Johnson; Editing by Richard Pullin)
