Ericsson has agreed to buy Vonage Holdings Corp. for $5.3 billion, amid efforts to penetrate the cloud communications services market.
If completed, the deal would be the largest ever in Ericsson’s history, as its previous largest acquisition of Telent’s telecom equipment assets was worth 1.2 billion pounds ($1.6 billion) in 2005, according to data compiled by Bloomberg.
The Swedish telecoms group will pay $21 per share in Vonage, according to a statement released Monday. The offer represents an enterprise value of about $6.2 billion.
Ericsson’s rush to services comes Cloud Computing Its profits stumbled due to lost business in China and component shortages due to global supply chain stress.
The company said it remains fully committed to its long-term EBITDA margin target of 15-18%.
The cloud communications platform accounts for 80% of the company’s $1.4 billion annual revenue, as developers have been able to include services like messaging and video in their products.