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Author: Ismaël Bouchafra

In Economy

Updated 11/22/21 1:59 PM | Posted on 11/22/21 1:59 PM

Ericsson’s offer on the listed group has received “the unanimous approval of the board of directors of Vonage” and is part of its “strategy of expanding wireless communications and broadening its global offering” , wrote the group in a press release.

The acquisition is the largest in Ericsson’s recent history and expands its business beyond its historic telecom network equipment market, particularly in 5G, where it battles with Chinese leader Huawei and Finnish Nokia .

At $ 21 per share, the shareholder offer is a premium of more than 28% over Vonage’s last closing price on the Nasdaq.

Founded in 2001, Vonage has long offered its voice over IP telephony services and in recent years has developed a communications platform (messaging, voice, video) using the cloud.

With 120,000 customers and developer access to its API, the platform accounts for 80% of its annual revenue, which currently stands at $ 1.4 billion. Its growth has been around 20% per year for the past three years.

Based in New Jersey, Vonage has more than 2,000 employees in North America, Europe and Asia, and its platform sees 25 billion minutes and messages per year, according to the company’s website.

Ericsson plans to keep its operations under the Vonage name and will make it an independent subsidiary in its results, specifies the Swedish group.

The market for UCaaS (Unified Communications as a Service) integration solutions that combine voice, messaging and video communications in a single tool is expected to reach $ 22 billion by 2025 with annual growth of 30%, according to Ericsson.

The acquisition is to be financed from the Swedish giant’s cash reserves, net liquidity which amounted to 5.6 billion euros at the end of September. Ericsson hopes to complete the transaction in the first half of 2022.

At the start of trading on the Stockholm Stock Exchange, the share of the Swedish group lost 3.87% in a market rising slightly.

Last year, Ericsson acquired another US company, Cradlepoint, which specializes in wireless WAN solutions for businesses, for $ 1.1 billion.

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