Nov. 16, 2015, 3:44 AM
- Ericsson (NASDAQ:ERIC) has quashed a recent media report that claimed Cisco (NASDAQ:CSCO) was seeking to buy the Swedish networking giant, stating there haven't been any merger talks.
- "We note that there are rumors in the market regarding an acquisition of Ericsson by Cisco possibly spurred by the recent announcement of a partnership between our two companies," Ericsson CEO Hans Vestberg said.
- Cisco shot down the report shortly after it surfaced on Friday.
Nov. 13, 2015, 3:49 PM
- A Swedish media report stating Cisco (CSCO -6%) is looking to buy mobile infrastructure/services giant Ericsson (ERIC - unchanged) led the latter's shares to briefly rise as much as 9.6% before giving back their gains. Markets are evidently skeptical.
- Worth noting: Cisco CEO Chuck Robbins just stated his company isn't looking to make large acquisitions. and is instead focusing on "small strategic" deals. Ericsson is currently worth $31B.
- Cisco and Ericsson are four days removed from announcing a comprehensive technology/reseller partnership. Ericsson will offer Cisco's switches/routers to mobile carriers in tandem with its own mobile infrastructure hardware and network services, Cisco will pair Ericsson's OSS/BSS network management software with its offerings, and the companies will form a "joint initiative focused on SDN/NFV and network management and control."
- Update: Cisco tells CNBC reports it's looking to buy Ericsson are "not true."
Sep. 10, 2015, 2:11 PM
- Ericsson (ERIC +1.1%) announced this morning it's buying Envivio, a provider of video processing hardware/software for delivering content to a variety of devices, for $55M.
- Ericsson, which has made a slew of acquisitions in recent years to lower its exposure to a slow-growing mobile infrastructure hardware market, plans to add Envivio to its TV and Media unit. In 2013, the company bought U.K. media/content service provider Red Bee Media, as well as Microsoft's Mediaroom IPTV infrastructure software unit. The year before that, the company bought Technicolor's broadcast services division.
- The deal appears to be fueling M&A hopes for Envivio rival Harmonic (NASDAQ:HLIT); Sidoti has upgraded the company to Buy. With a current $546M market cap, Harmonic would be a bigger fish to swallow.
Sep. 10, 2015, 8:09 AM| Sep. 10, 2015, 8:09 AM | 1 Comment
May 27, 2015, 4:38 AM
- As the telecom-network industry consolidates, Ericsson (NASDAQ:ERIC) is now more open to a bigger M&A deal in order to remain competitive in the market, Bloomberg reports.
- "I see no reason why we, given the right preconditions, would exclude a larger deal," Ericsson Chairman Leif Johansson said in an interview this month. "But as you know, there aren't that many left."
- CEO Hans Vestberg plans to gather with his top managers in June to discuss strategy, and a key area is what the company can do to counter Nokia's recent $16.6B acquisition of Alcatel-Lucent.
- Possible targets: Ciena (NYSE:CIEN), Infinera (NASDAQ:INFN) and Juniper (NYSE:JNPR)
Apr. 18, 2015, 8:04 PM
- Nokia (NYSE:NOK) and Alcatel-Lucent's (NYSE:ALU) planned merger could unravel Nokia's R&D partnership/reseller deal with Juniper (NYSE:JNPR). Juniper, which has partnered with Nokia on solutions that pair the former's routers with the latter's base stations and mobile core network gear, counts Alcatel as its second-biggest rival (after Cisco) in the carrier router market, and also squares off against the company in other markets such as carrier SDN software.
- Ruckus (NYSE:RKUS) is another Nokia partner that could be in the crosshairs: The company competes against Alcatel in carrier Wi-Fi hardware, and has a reseller deal with Nokia that goes back to 2012. The deal was recently expanded to cover Wi-Fi/4G small cell systems.
- At the same time, the merger has fueled speculation one or more rivals could respond with acquisitions of their own. A potential acquisition of Juniper by mobile infrastructure giant Ericsson (NASDAQ:ERIC) has especially been the subject of much talk.
- Ericsson is also viewed as a potential suitor for optical networking hardware vendors/fellow Alcatel rivals Ciena and Infinera. Ruckus has been seen as a potential M&A target for a long time. However, it currently competes against Ericsson, which bought Wi-Fi hardware vendor BelAir Networks in 2012.
- RF backhaul hardware maker DragonWave (NASDAQ:DRWI) could also lose business thanks to the merger; it bought Nokia's RF backhaul business in 2012. and maintains a reseller deal. However, H.C. Wainwright recently downplayed those concerns, arguing Alcatel's RF backhaul systems are expensive and clunky.
- Juniper and Ericsson report earnings on April 23, and Ruckus on April 30.
Apr. 16, 2015, 7:19 PM
- BMO, Citi, Crag-Hallum, Bernstein, Goldman, Credit Suisse, and Natixis have downgraded Alcatel-Lucent (NYSE:ALU) following news of its all-stock merger with Nokia (NYSE:NOK). Nokia has been upgraded by Bernstein, Natixis, and Morgan Stanley, and downgraded by Citi. RBC, and Finland's Pohjola Bank.
- Citi: "We continue to believe Nokia would have been better off acquiring just the Wireless assets but were forced to acquire the entire company possibly leading to what we believe was a low purchase price...We believe the all stock structure (and no collar) creates new risk for Alcatel holders..."
- The firm thinks a part-cash deal would've been better, given low interest rates. It also argues a target of €900M/year in cost savings by 2019 could be tough to hit, given limited R&D overlap.
- RBC: "We're strong proponents of industry consolidation in markets with high R&D investments and intense price competition" But like Citi, the firm thinks Nokia should've only bought Alcatel's wireless assets. It also believes "product portfolio rationalization may take 3-5 years," and that R&D commitments to carriers could affect near-term cost savings.
- Deutsche, in a note just before the announcement: "We believe a Nokia/ALU deal would create share gain potential for Ericsson (NASDAQ:ERIC), firstly in China, where telcos would likely want to restore share balance between overseas vendors, and in North America at Sprint, where Ericsson would likely be able to re-enter ... In addition, we note that ALU’s overlay technology is not compatible with Nokia’s single RAN which in our view will make it time consuming to combine R&D roadmaps and extract financial synergies."
- Morgan Stanley is more optimistic: "With Alcatel, Nokia now has exposure to the #2 edge routing player, taking share in both edge and core, a strong footing in the consolidating optical market, and a duopoly position in the growing wireline access market ... In the US, Nokia will now supply to all big four wireless operators and now has enough scale to compete with Ericsson and Huawei on 5G. The larger Nokia will have doubled its patent portfolio too – which makes the patent story more credible."
- Both companies fell slightly today. Nokia is nearly flat since a Friday report about a potential HERE unit sale (later confirmed) sparked M&A speculation. Alcatel, which has been on a roller-coaster ride, is up 2% since the report.
- Previously: The merger announcement, details/asset sale plans
Apr. 13, 2015, 4:10 PM
- Sources tell Bloomberg Nokia (NYSE:NOK) might announce a deal to buy Alcatel-Lucent's (NYSE:ALU) wireless infrastructure hardware assets "as early as this week." Though a full-blown buyout of Alcatel has also reportedly been examined, a wireless deal "remains the most likely scenario."
- Nokia execs are reportedly working to win the French government's support. French government reps are said to be working on a compromise that would protect some domestic R&D jobs.
- Acquiring Alcatel's wireless unit (2014 sales of $5B) would yield cost synergies and increase Nokia's mobile infrastructure scale as it battles against market leader Ericsson (ERIC) and China's Huawei and ZTE. It would particularly strengthen Nokia's position in North America (Lucent's stronghold prior to the merger) and China. At the same time, the post-merger entity could lose share with carriers already relying on both Alcatel and Nokia, and wanting to maintain their current level of supplier diversity.
- For Alcatel, a sale would further lower the company's net debt load (a recent priority) and shed a business that has underperformed relative to Alcatel's IP routing unit.
- Alcatel closed up 7.9%. Nokia closed up 3%.
- Earlier: Nokia reportedly in talks to buy Alcatel-Lucent assets
Mar. 16, 2015, 11:58 AM
- Ericsson (ERIC +1.8%) is acquiring the telecom services ops of China's Sunrise Technology for an undisclosed sum. The acquired business provides IT services for telecom operations and business support (OSS/BSS) systems, and has 1K employees.
- Ericsson argues the purchase will help it better service Chinese carriers set to "replace their legacy IT systems with next-generation solutions that will enable them to launch digital offerings." Thanks in large part to strong 4G infrastructure orders, China has been one of Ericsson's healthier markets in recent quarters.
- Ericsson bought leading OSS/BSS software vendor Telcordia back in 2012, and has since made a string of acquisitions to grow its OSS/BSS services exposure, as it continues forecasting the broader telecom services/support solution market will outgrow the telecom equipment market.
Feb. 23, 2015, 7:19 PM
- Ericsson (NASDAQ:ERIC) is buying the assets of TimelessMIND, a Canadian provider of consulting and systems integration services for telecom operations and support (OSS/BSS) systems. ~30 employees/consultants are expected to join Ericsson.
- With Ericsson forecasting the telecom services and support solutions market will respectively see 4%-6% and 7%-9% CAGRs from 2013-2017 (compared with just a 2%-4% CAGR for network equipment), the company has made a string of acquisitions meant to grow its services exposure.
- The mobile infrastructure giant also announces it's providing its Device Connection Platform, a cloud service for managing an enterprise's Web-connected embedded devices (the proverbial Internet of Things), to a group of 36 Asian and African carriers (known as the Bridge Alliance). The IoT service market is expected to grow rapidly over the next few years.
Oct. 1, 2014, 2:38 PM
- Ericsson (ERIC -1%) has bought Ambient, a smart grid networking tech provider that recently filed for Chap. 11. Ericsson had previously submitted a $7.5M stalking-horse bid.
- Ambient's platform features hardware and software that allows utilities to run multiple smart grids in parallel, and to do so using a variety of telecom technologies (inc. cellular and Wi-Fi, which Ericsson has plenty of experience with).
- Ambient also has a sizable smart grid patent portfolio, and offers various consulting/installation services. Ericsson client Verizon is a mobile network partner. Silver Spring (SSNI -4.7%) is among Ambient's rivals.
Sep. 22, 2014, 2:18 PM
- Ericsson (ERIC -0.6%) has bought a majority stake in Apcera, provider of an enterprise cloud app development platform (PaaS) that tries to differentiate itself through a focus on security/policy controls. Terms are undisclosed.
- Apcera, which faces competition from Microsoft, Amazon, Salesforce, Google, and several other prominent rivals, will continue to be run independently. Its PaaS platform supports public, private, and hybrid cloud deployments.
- Ericsson predicts integrating Apcera's offerings with its existing cloud management software/services will allow it to provide carriers and enterprises with "complete cloud automation to run all workloads and use cases, while providing complete control for infrastructure."
- The mobile infrastructure giant hasn't been shy about using M&A to increase its software and services exposure.
Sep. 6, 2013, 11:35 AM
- Ericsson (ERIC +4.3%) has acquired femtocell base station developer Airvana's 3G EV-DO ops in an all-stock deal. (PR)
- Though Ericsson notes Airvana supplies it with EV-DO software and states the deal will help it support carriers who have deployed EV-DO (e.g. Verizon, Sprint, KDDI - they're now mostly investing in 4G), the company's main goal appears to have been the dismissal of a $330M suit filed by Airvana against Ericsson, in which the former alleged the latter conspired with LG to sell Airvana hardware without including (royalty-bearing) software.
- Separately, Ericsson has announced a 4G infrastructure deal with Telefonica's Spanish unit. Ericsson will be the supplier for 1K of the 2.2K 4G nodes Telefonica plans to deploy in 2013, including the ones for Madrid and Barcelona. Alcatel-Lucent announced a Spanish 4G deal with Telefonica yesterday.
- Altogether, Ericsson says it has scored 160+ 4G deals worldwide. Earlier this year, research firm TBR observed Ericsson "took a commanding lead" of the 4G infrastructure market in 2012 thanks to North American, Japanese, and South Korean deal traction. It forecast Ericsson would maintain the pole position in 2013, but added rivals are set to gain share.
Sep. 3, 2013, 5:27 AM
- Ericsson (ERIC) and Alcatel-Lucent (ALU) jump sharply following news that Nokia (NOK) is selling its handset unit to Microsoft, leaving the Finnish company to focus on its telecom-equipment division NSN, among other things. Could industry consolidation be on the cards?
- As SA auther Jacob Steinberg notes, the deal will leave Nokia with a cash mountain of almost $20B. That would theoretically be more than enough to buy Alcatel-Lucent, whose market cap is just $5.86B.
- Ericsson is +3.9% in Stockholm and ALU is +11.2% premarket in the U.S.
Jul. 12, 2013, 5:47 PM
Ericsson (ERIC) continues its software/services M&A spree by acquiring TeleOSS Consulting, a Thai provider of consulting/systems integration services related to the OSS systems used by carriers to manage networks and provision services. Ericsson bought OSS software leader Telcordia in 2011, and Canadian OSS software provider ConceptWave in 2012. (2013 acquisitions: Mediaroom, Red Bee Media)| Jul. 12, 2013, 5:47 PM
Jul. 1, 2013, 1:33 PM
Ericsson (ERIC +1.3%) grows its services exposure by acquiring Red Bee Media, a 1.5K-employee provider of media/content services based out of the U.K. Ericsson asserts Red Bee, whose services include production, marketing, syndication, and much else, strengthens a broadcast services unit expanded last year via the Technicolor deal, and (given huge mobile video growth) also brings mobile synergies. The purchase comes 2 months after Ericsson struck a deal to buy Microsoft's Mediaroom IPTV platform unit, and 8 months after Ericsson forecast stronger CAGRs for telecom services and support solutions than for telecom equipment. Deal terms are undisclosed.| Jul. 1, 2013, 1:33 PM