Ericsson sells US call-routing business iconectiv for $1bn
iconective will be sold for SEK 10.6 billion
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Ericsson has agreed to sell its US-based subsidiary iconectiv to Koch Equity Development LLC for approximately 10.6 billion Swedish kronor ($1 billion).
Thedealis expected to provide Ericsson with a one-off earnings before interest and taxes benefit of around 8.8 billion kronor ($800 million) upon completion.
iconectiv, which has been part of the Swedish telecomms giant’s portfolio since its acquisition in 2012, has operated within Ericsson’s Segment Enterprise.
Ericsson will sell iconectiv for $1 billion
iconectiv specializes in number portability, core network and operations management, numbering and data exchange services. Despite its healthy finances, contributing around $100 million to Ericsson’s 2023 net income, the companies have not been as strategically aligned as initially hoped.
Ericsson has co-owned iconectiv with private equity firm Francisco Partners since 2017 – its sale to Koch is considered a strategic move that will allow Ericsson to refine its business focus.
The transaction, subject to customary closing conditions and regulatory approvals, is expected to be completed in the first half of 2025. Ericsson anticipates a cash benefit of around $1 billion after accounting for anticipated taxes, transaction expenses, and other liabilities.
Proceeds from the sale could help Ericsson streamline its operations and focus on core areas of its business, helping it to bolster its financial position in an evolving telecomms market.
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The Swedish firm declared a 7% decrease in net sales last quarter, compared with the year before, but the 12% increase over the preceding quarter shows signs of recovery.
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With several years’ experience freelancing in tech and automotive circles, Craig’s specific interests lie in technology that is designed to better our lives, including AI and ML, productivity aids, and smart fitness. He is also passionate about cars and the decarbonisation of personal transportation. As an avid bargain-hunter, you can be sure that any deal Craig finds is top value!
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