Ericsson (NASDAQ: ERIC) has announced its acquisition of Vonage Holdings Corp. (NASDAQ: VG). The two companies have entered an agreement that will see Ericson pay $21 per share, leading to an acquisition price of approximately $6.2 billion.
Vonage is rated among the best UCaaS providers and is seen as one of the leaders. Vonage phone systems are mainly cloud-based and its acquisition stresses Ericsson’s efforts to get into the networking world. Its acquisition was agreed unanimously by the board of Vonage and Ericsson after long negotiations.
Ericsson has previously stated that it intends to expand worldwide in the wireless enterprise to offer its existing customer base an increased share of its market value. The acquisition now places the tech company on the right track to fulfill its intentions as time goes by. Keep on reading to learn more.
What Does Ericsson Vonage Acquisition Mean?
Vonage acquisition means different things to different players. For Vonage shareholders, it means that they have to learn how to cope with their new receiver. For Ericsson, this places them in position as one of the leading VoIP service providers.
While announcing the acquisition of this leading VoIP company, Börje Ekholm, CEO and President of Ericsson said that the acquisition places his firm in the right position to be a leader in mobile networks.
He also stated that the core strategy is to build leading mobile networks via technology leadership. This provides the foundation to build an enterprise business. The acquisition of Vonage is the next step in delivering on that strategic priority.
Vonage gives us a platform to help our customers monetize the investments in the network, benefitting developers and businesses,” said Börje Ekholm.
Ericsson Expands its Network Communication Solutions
The acquisition now positions Ericsson among the best UCaaS providers, taking the position that Vonage has held among VoIP companies for a long time. According to Vonage’s management, the decision to join Ericsson was made in the best interest of shareholders. The company has told shareholders to worry less about the move.
For Ericsson, the acquisition only helps to build upon its previous developments. In September 2020, Ericsson announced its successful integration of Cradlepoint. Over the past year, Cradlepoint has continued to develop under the leadership of Ericsson.
The board of Vonage says that such tremendous progress gives them confidence in Ericsson’s capacity. They are asking their shareholders to remain patient so as to enjoy the fruits of the move in the near future.
Vonage and the Vonage Communications Platform
Vonage phone systems are offered by Vonage and Vonage Communication Platforms (VCP). Their systems stand out as a leader in the provision of cloud-based solutions. At the end of the 2021 financial year, the company recorded sales of $1.4 billion and a margin of 14% free cash flow.
Being one of the best UCaaS providers, Vonage hands over a strong customer base and reliable assets. Currently, the company serves over 120,000 customers and more than one million registered developers.
What Next After Acquisition of Vonage
Currently, the leaders of the two companies are handling the transfer details. Once the transfer is complete, Vonage will become a fully owned subsidiary of Ericsson. However, the name Vonage will not be dropped or its employees. The subsidiary will also handle its book independently.
Vonage boasts of over 2,200 employees, most of whom are located at its headquarters in New Jersey in the United States. The employees of the company have been guaranteed a smooth transition since the company does not seek to change much in terms of operations.
It is time for investors to watch and see how services are delivered. Over the years, UcaaS Review has always ranked Vonage among the best UCaaS providers and the leading VoIP service providers. Investors and customers of Vonage have to wait and see if new owners will maintain the high standards.