Ericsson AB agrees on a deal to buy Vonage Holdings Corp., for $6.2B to expand its wireless enterprise business, according to a report by The Wall Street Journal on Monday.
- Ericsson, in its biggest deal ever, accepted to pay $21 per share in cash for Vonage, accounting for a 28% premium to Friday’s closing share price. The acquisition will be funded through Ericsson’s existing cash resources.
- The deal is the latest in a series of acquisitions in the cloud-communications software industry.
- The field expanded during the pandemic, as companies sought to link with their customers virtually.
- The two giants of the field, Twilio Inc. in San Francisco, and Sweden’s Since AB, has recently expanded, part of a consolidation effort in the industry.
Ericsson expects the deal to increase earnings per share and free cash flow before any acquisition starting 2024 onward. Ericsson down -3.72%, VG up +25.78%, Pre-market trading.