(AOF) – Vonage Holdings stock jumped 26.21% to $ 20.66 after it announced it was bought by Ericsson for around $ 6.2 billion in enterprise value. The Swedish telecoms equipment maker is offering $ 21 per share of the American company specializing in communication solutions for businesses via the cloud, offering a premium of just over 28% over Friday’s closing price.
The merger agreement was unanimously approved by Target’s board of directors. The acquisition will be funded from Ericsson’s existing liquidity.
Vonage’s revenue was $ 1.4 billion in the 12-month period ending September 30, 2021, and over the same period, Vonage posted an Adjusted EBITDA margin of 14 % and free cash flow of $ 109 million.
The cloud-based Vonage Communications Platform (VCP) is used by more than 120,000 customers and more than one million developers worldwide.
Commenting on the transaction, Börje Ekholm, CEO of Ericsson, said: “The core of our strategy is to build leading mobile networks through our technological leadership. (…) The acquisition of Vonage is the next step. in achieving this strategic priority. Vonage gives us a platform to help our customers monetize network investments, for the benefit of developers and businesses. “
Rory Read, CEO of Vonage, said: “Ericsson and Vonage have a shared ambition to accelerate our long-term growth strategy. The convergence of internet, mobility, cloud and powerful 5G networks is waveforming digital transformation and smart communications, which is driving a secular change in the way businesses operate.
Closing expected in the first half of 2022, subject to the approval of Vonage shareholders, regulatory approvals and other customary conditions.
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