Ericsson announces sale of iconectiv
Rhea-AI Summary
Ericsson (NASDAQ: ERIC) has announced the sale of its US subsidiary iconectiv to Koch Equity Development The transaction is expected to generate a cash benefit of approximately SEK 10.6 billion (USD 1.0 billion) for Ericsson after taxes and expenses. The company anticipates recording a one-off EBIT benefit of about SEK 8.8 billion (USD 0.8 billion) upon closing. iconectiv, acquired by Ericsson in 2012, is a leading provider of network number portability solutions and data exchange services. The sale is subject to regulatory approvals and is targeted for completion in the first half of 2025. In 2023, iconectiv contributed approximately SEK 1.0 billion (USD 0.1 billion) to Ericsson's net income.
Positive
- Expected cash benefit of SEK 10.6 billion (USD 1.0 billion) from the sale
- Anticipated one-off EBIT benefit of SEK 8.8 billion (USD 0.8 billion)
- Divestment allows iconectiv to continue growth under new ownership
Negative
- Loss of iconectiv's SEK 1.0 billion (USD 0.1 billion) contribution to annual net income
- Reduction in Ericsson's portfolio diversity and market presence in number portability solutions
News Market Reaction
On the day this news was published, ERIC gained 1.27%, reflecting a mild positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
- iconectiv is a US subsidiary of Ericsson acquired in 2012, and a provider of network number portability solutions and data exchange services
- The divestment will allow iconectiv to continue its growth trajectory under the new ownership of Koch Equity Development LLC
Ericsson's cash benefit from the Transaction, after the settlement of anticipated taxes, transaction expenses, and other liabilities, is expected to be approximately
Ericsson expects to record a one-off EBIT benefit of approximately
The Transaction is subject to customary closing conditions, including regulatory approvals, with completion targeted during the first half of calendar 2025.
iconectiv is consolidated by Ericsson and reported within Segment Enterprise. iconectiv's contribution [2] to Ericsson 2023 net income was approximately
iconectiv is a US subsidiary of Ericsson acquired in 2012 as part of the Telcordia acquisition. Since 2017, iconectiv has been co-owned with private equity firm Francisco Partners. iconectiv serves over 5,000 customers across various sectors as a leading provider in number portability solutions, and a provider of core network and operations management, numbering and data exchange services as its main segments, and with limited strategic synergies with the rest of Ericsson's portfolio.
[1] Assuming a USD - SEK exchange rate of 10.56. Realized exchange rate to be determined on closing.
[2] Contribution to net income including minority interests and shareholder loan impacts. Ericsson's shareholder loan to iconectiv was
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Contact person
Daniel Morris, Head of Investor Relations
Phone: +44 7386657217
E-mail: investor.relations@ericsson.com
Investors
Lena Häggblom, Director, Investor Relations
Phone: +46 72 593 27 78
E-mail: lena.haggblom@ericsson.com
Alan Ganson, Director, Investor Relations
Phone: +46 70 267 27 30
E-mail: alan.ganson@ericsson.com
Media
Ralf Bagner, Head of Media Relations
Phone: +46 76 128 47 89
E-mail: ralf.bagner@ericsson.com
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Phone: +46 10 719 69 92
E-mail: media.relations@ericsson.com
Forward-looking statements
This release includes forward-looking statements. All statements other than statements of historical fact are forward-looking statements. The words "believe," "expect," "foresee," "anticipate," "assume," "intend," "likely," "projects," "may," "could," "plan," "estimate," "forecast," "will," "should," "would," "predict," "aim," "ambition," "seek," "potential," "target," "might," "continue," or, in each case, their negative or variations, and similar words or expressions are used to identify forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially and adversely from those expressed in, or implied or projected by, the forward-looking statements.
We caution investors that these statements are subject to risks and uncertainties many of which are difficult to predict and generally beyond our control that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements.
Important factors that could affect whether and to what extent any of our forward-looking statements materialize include, but are not limited to, the factors described in the section "Risk Factors" in the latest interim reports, and in "Risk Factors" in the Annual Report 2023.
These forward-looking statements also represent our estimates and assumptions only as of the date that they were made. We expressly disclaim a duty to provide updates to these forward-looking statements, and the estimates and assumptions associated with them, after the date of this release, to reflect events or changes in circumstances or changes in expectations or the occurrence of anticipated events, whether as a result of new information, future events or otherwise, except as required by applicable law or stock exchange regulations.
This is information that Telefonaktiebolaget LM Ericsson is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 22:30 CEST on August 16, 2024.
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SOURCE Ericsson
FAQ
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