Ericsson, an international networking company has decided to take over cloud communications company Vonage for a sum of 6.2 billion dollars. A result of the pandemic that the world saw was acquisitions in cloud communication software. With Vonage acquisition, Ericsson will get a more modern approach like a cloud contact center, communications API, and also a voice-over-internet protocol solution. Ericsson says that with the communications API at Vonage and the developers it will make 4G and 5G compelling to its service provider customers.
The company is supplying 5G infrastructure equipment to all of the big U.S. wireless operators. Ericsson plans to retain all of its 2200 Vonage employees. As well as CEO Rory Reed will remain with Ericsson executive team. With this acquisition, the company will get back into enterprise space. But it was the strong financials that Vonage Communications Platform had which attracted Ericsson. Vonage got into its CPaaS business in 2016.
Börje Ekholm, CEO of the company said that this is a part of the company strategy to begin capturing more enterprise business in the future. He also said that Vonage gave a platform to their customers to monetize their investment in the network, benefitting developers and businesses.
With the acquisition, the company not only gets a technology portfolio but also a customer base of more than one million registered developers. Vonage was conducting excellent business that generated 1.4 billion dollars in the 12 months up until 30th September.
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. Once the deal is completed, Vonage after the formalities shall become a wholly-owned subsidiary of Ericsson. Post the merger, Vonage shall continue to operate under its existing name. The acquisition will be conducted utilizing a merger agreement through which Ericsson will acquire all of Vonage’s outstanding shares at an all-cash price of $21 per share.
