Iconectiv

History

2024: Ericsson sells Iconectiv to Koch Equity Development

On August 16, 2024, the Swedish company Ericsson, which is suffering losses, announced the conclusion of a binding agreement to sell its subsidiary Iconectiv. The buyer is Koch Equity Development LLC, and the transaction amount will be 10.6 billion Swedish kronor, or about $1 billion (at the time of signing the contract).

Iconectiv is an American company Ericsson, obtained in 2012 as part of the acquisition of Telcordia. Iconectiv has been co-owned with private equity firm Francisco Partners since 2017. According to Ericsson itself, as of mid-2024, Iconectiv serves more than 5,000 customers in various sectors, providing solutions for routing, mobile number transfer, etc. The company is a pioneer in many areas, including caller identification and intelligent networks. Iconectiv was founded in 1983 and is headquartered in Bridgewater, New Jersey.

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Bloomberg

Ericsson initiated the process of selling Iconectiv in 2020 with an initial estimate of $1.5 billion to $2 billion. But negotiations with potential buyers dragged on, and the total amount of the asset was $1 billion. The sale is in line with Ericsson's strategy to streamline operations and improve financial performance related to operations in the telecom equipment market, according to Bloomberg. Ericsson has faced challenges due to lower-than-expected demand for 5G solutions.

The deal is scheduled to be completed in the first half of 2025 after obtaining the necessary approvals from regulators. The sale is expected to generate Ericsson a one-time profit before interest and taxes of SEK 8.8 billion (approximately $0.85 billion).^[1]

Notes