Ericsson are acquiring Vonage for USD 6.2 billion to spearhead, what it says is, the creation of a global network and communication platform for open innovation “The core of our strategy is to build leading mobile networks through technology leadership. This provides the foundation to build an enterprise business.” Börje Ekholm, President and CEO of Ericsson So what does this mean? It signals a greater direct push into the Enterprise market for Ericsson; a market that it has, to date, avoided selling directly too. With the VCP portfolio Ericsson acquires 120,000 customers. Growth of Vonage recently has been flat to single digit range and free cash flow is 8% of total sales (USD 1.4 Billion). VCP is 80% of total revenue. The deal won’t be accretive to EPS for Ericsson until 2024 at earliest. Jana Partners actively pushed for the sale. Merger success will require changed thinking in Ericsson With today’s announcement it’ll be interesting to see the ability of Ericsson to execute on this merger. The two companies have very different cultures and business models which need careful alignment, if they are not to destroy the value of the merger. Vonage is a direct to enterprise software company being a acquired […]