The Swedish telecom company Ericsson announced on Friday that it will acquire the Boise-based company Cradlepoint, a provider of wireless Internet products, for 1.1 billion dollars.
“There will be a lot of new local millionaires from this transaction,” said Pat Sewall, founder and former CEO of Cradlepoint. He left the company in 2012.
Sewall said that each technical employee during his time at the company was offered equity in the company.
Cradlepoint, headquartered in the downtown Boise Plaza building, now employs about 650 people worldwide. It also has a research and development center in Silicon Valley, plus offices in the UK and Australia.
The company will remain an independent subsidiary of Ericsson with its headquarters in Boise, operating under the Cradlepoint brand. Ericsson says it will also retain Cradlepoint’s existing employees and retain George Mulhern as CEO.
Jay Larsen, chairman of the Idaho Technology Council, said Ericsson’s acquisition could be the largest deal ever secured by a Boise-based company.
“It really shows the strength of the technical ecosystem in Treasure Valley,” he said by telephone.
Expect Cradlepoint to grow in Boise, Larsen added.
“They think this will be a great place to continue building on Cradlepoint’s innovation,” he said.
Cradlepoint was founded in 2004 by Pat Sewall, who later co-founded Ryan Adamson and Gary Oliviero. The company began creating routers that converted cell signals to Wi-Fi hotspots. Later, they focused on providing routers and adapters as well as related software that allows companies to connect wirelessly via 4G and 5G networks.
Cradlepoint’s sales in 2019 amounted to approximately $ 136 million, according to a press release.
Ericsson said that Cradlepoint is the market leader in its field and would help Ericsson gain a larger market share in the 5G space.
The transaction is expected to be completed during the fourth quarter of 2020. Ericsson will pay for Cradlepoint in cash.
The acquisition could make waves across Boise’s technical space.
Other new acquisitions of technology companies in Boise – such as Intuit’s acquisition of TSheets 2017 or Microsoft’s acquisition of ProClarity 2006 – benefited the companies’ founders and early investors the most, said Jeff Reynolds, a Boise technology and marketing consultant.
Because Cradlepoint allowed its employees to get equity in the company, the benefits of a sale “have the potential for positive impact spread across society,” Reynolds said by phone.
Some of Cradlepoint’s earliest investors were also local, such as Highway 12 Ventures, a Boise-based venture capital firm led by Mark Solon and Phil Reed; Gem State Angel Fund; and nearly a dozen angel investors.
Sewall is now investing in technology companies through the Trolley House Group. He said he hopes some of the “recent millionaires” will do what he did: start a new business here in town.
“You can build a billion dollar business in Boise, Idaho,” he said.