Ericsson enters into agreement forUSD 6.2 billion cash offer to acquire Vonage, a global provider of cloud-based communications, with unanimous approval of the Vonage Board of Directors- Acquisition underlines
Ericsson strategy to expand its presence in wireless enterprise and broaden its global offerings - Robust performance and growth prospects are built on Vonage Communications Platform (VCP), which delivers about 80% of Vonage's total revenues and, serves more than one million registered developers globally
- Transaction expected to be accretive to
Ericsson's EPS (excluding non-cash amortization impacts) and free cash flow before M&A from 2024 onwards - Closing expected in the first half of 2022, subject to Vonage shareholder approval, regulatory approvals, and other customary conditions
The merger agreement was approved unanimously by the
"Today Network APIs are an established market for messaging, voice and video, but with a significant potential to capitalise on new 4G and 5G capabilities. Vonage's strong developer ecosystem will get access to 4G and 5G network APIs, exposed in a simple and globally unified way. This will allow them to develop new innovative global offerings. Communication Service Providers will be able to better monetize their investments in network infrastructure by creating new API driven revenues. Finally, businesses will benefit from the 5G performance, impacting operational performance, and share in new value coming from applications on top of the network."
"We believe joining Ericsson is in the best interests of our shareholders and is a testament to Vonage's leadership position in business cloud communications, our innovative product portfolio, and outstanding team."
For
Vonage and the Vonage Communications Platform (VCP)
Vonage, a global provider of cloud-based communications, has a strong track record of growth and margin evolution. Sales were
The cloud-based Vonage Communications Platform (VCP) serves over 120,000 customers and more than one million registered developers globally. The API (Application Programming Interface) platform within VCP allows developers to embed high quality communications - including messaging, voice and video - into applications and products, without back-end infrastructure or interfaces. Vonage also provides
VCP accounts for approximately 80% of Vonage's current revenues and delivered revenue growth in excess of 20% in the three-year period to 2020, with adjusted EBITDA margins moving from -19% in 2018 to break-even in the 12-month period to
Vonage's presence in the Communication Platform as a Service (CPaaS) segment will provide
The combination of Vonage's customer base and developer community and
In the longer term,
Overview of the transaction
The acquisition will be conducted by means of a merger agreement through which
The acquisition will be financed through
The transaction is expected to deliver near-term revenue synergy opportunities, including white-labelling and cross-selling of the combined product portfolio estimated to contribute
The transaction is expected to be accretive to EPS (excluding non-cash amortization impacts) and free cash flow before M&A from 2024 onwards.
On completion, Vonage will become a wholly owned subsidiary of
Completion of the transaction is subject to Vonage shareholder approval, regulatory approvals and other customary conditions and is expected within the first half of 2022.
INVITATION TO MEDIA AND ANALYST CALL
The company will hold two conference calls for journalists, financial analysts, and investors.
Conference call
The first conference call will begin
Join the audio webcast or please go to www.ericsson.com/investors
To ask a question, please call:
International/
US: +1 631 913 1422 (Toll-free US: +1 855 85 70686)
PIN code: 89920727#
Please call in at least 15 minutes before the briefing starts.
The webcast will be available on-demand after the event and can be viewed on our website.
Conference call
The second conference call will begin
Join the audio webcast or please go to www.ericsson.com/investors
To ask a question, please call:
International/
US: +1 631 913 1422 (Toll-free US: +1 855 85 70686)
PIN code: 26077162#
Please call in at least 15 minutes before the briefing starts.
The webcast will be available on-demand after the event and can be viewed on our website.
NOTES TO EDITORS:
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Phone: +46 705 75 29 06
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Investors
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Phone: +46 72 593 27 78
E-mail: lena.haggblom@ericsson.com
Global Press Office
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E-mail: media.relations@ericsson.com
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