Ericsson Set to Acquire Vonage For $6.2 Billion

Manufacturer of mobile telecommunication and networking equipment Ericsson (STO: ERIC-B) announced having agreed to acquire United States based provider of business cloud communications Vonage for $6.2 billion.

The merger agreement was approved unanimously by the Board of Vonage. 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,” said Ericsson.

For the financial year ended September 30 2021, Vonage recorded sales of $1.4 billion and a margin on adjusted earnings before interest, tax and depreciation (EBITDA) of 14% plus a cash flow of $109 million for the period.

Vonage Communications Platform which offers unified communications provides its services to over 120,000 clients. Currently, the platform has over one million registered developers around the world.

Ericsson says that it expects this acquisition deal to increase its earnings per share (EPS) minus non-cash amortization impacts and free cash flow starting from 2024.

Sources involved in the deal have revealed that the deal is expected to be closed during the first half of next year following certain regulatory approvals and approval by shareholders of Vonage.

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