Vonage Stock Soars on $6.2 Billion Deal to Be Bought by Ericsson
Adrian Brown/Bloomberg News.
Shares of
Vonage
,
the cloud-based telecom company, soared in premarket trading Monday after agreeing to be acquired by
Ericsson
for $21 a share in cash.
The companies, in a statement Monday, said the deal had an enterprise value of $6.2 billion.
Vonage (ticker: VG) rose nearly 28% to $20.95 in premarket trading. The stock closed Friday at $16.37. U.S.-listed shares of Ericsson (ERIC), the Swedish telecommunications group, fell 3.8% in premarket trading.
The board of Vonage unanimously approved the deal.
Ericsson said the acquisition builds upon its “stated intent to expand globally in wireless enterprise, offering existing customers an increased share of a market valued at $700 billion by 2030.”
“Vonage gives us a platform to help our customers monetize the investments in the network, benefitting developers and businesses,” said Ericsson Chief Executive Officer Borje Ekholm.
Vonage has been under pressure to sell itself since late summer from activist hedge fund Jana Partners, and was urged to hire a financial adviser to consider a sales process. Jana holds a 4% stake in Vonage.
Write to Joe Woelfel at joseph.woelfel@barrons.com