Ericsson, a Swedish telecom equipment supplier, is buying Vonage, a cloud communications firm based in the United States, for $6.2 billion in a deal that would help the company expand its wireless services for business customers.
The purchase would also offer it access to software developers who may create new applications to take advantage of capabilities integrated into Ericsson’s new fifth-generation high-speed wireless networks.
The purchase, according to CEO Borje Ekholm, is the “next step” in executing the company’s strategic aim of constructing leading mobile networks.
“Vonage provides us with a platform to enable our clients to monetize their network investments, which benefits developers and companies,” Ekholm stated in a news release.
In an all-cash agreement, Ericsson agreed to buy Vonage for $21 per share, a 28 percent premium over Vonage’s Friday closing share price. In the first half of 2022, the acquisition is scheduled to close.
Vonage, established in Holmdel, New Jersey, was one of the first companies to offer internet-based telephone services. It has evolved into a platform for application programming interfaces (APIs), which enable various software programs to communicate with one another.
