Ericsson buys cloud company Vonage for $ 6.2 billion


The Ericsson logo can be seen at its headquarters in Stockholm, Sweden on June 14, 2018. REUTERS / Olof Swahnberg / File Photo

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STOCKHOLM, Nov. 22 (Reuters) – Mobile telecommunications equipment maker Ericsson (ERICb.ST) announced Monday that it has agreed to buy cloud communications company Vonage for $ 6.2 billion.

“The merger agreement has been unanimously approved by the board of directors of Vonage,” Ericsson said in a statement.

“The transaction builds on Ericsson’s stated intention to expand globally into wireless businesses, giving existing customers an increased share of a market valued at $ 700 billion by 2030. “

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Vonage achieved sales of $ 1.4 billion in the 12-month period to September 30, 2021 with an adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) margin of 14% and $ 109 million free cash flow.

The Vonage cloud-based communications platform serves more than 120,000 customers and more than one million registered developers worldwide.

Ericsson said he expected the deal to increase earnings per share – excluding non-cash amortization effects – and free cash flow from 2024.

The transaction is expected to close in the first half of 2022, subject to Vonage shareholder approval, regulatory approvals and other conditions.

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Reporting by Simon Johnson; Editing by Richard Pullin

Our standards: Thomson Reuters Trust Principles.


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