Ericsson (NASDAQ: ERIC) announces that it has entered into a binding agreement with Koch Equity Development LLC regarding the sale of iconectiv (the “Transaction”).

Ericsson’s cash benefit from the transaction is expected to be approximately SEK 10.6 billion (1) (USD 1.0 billion), after settlement of expected taxes, transaction costs and other liabilities.

Ericsson expects a one-time EBIT benefit of approximately SEK 8.8 billion (1) (USD 0.8 billion) upon completion of the transaction.

The transaction is subject to customary closing conditions, including regulatory approvals, and is expected to close in the first half of 2025.

iconectiv is consolidated by Ericsson and reported in the Enterprise segment. iconectiv (2)’s contribution to Ericsson’s net profit in 2023 was approximately SEK 1.0 billion (USD 0.1 billion).

iconectiv is a US subsidiary of Ericsson, acquired in 2012 as part of the acquisition of Telcordia. Since 2017, iconectiv has been jointly owned by private equity firm Francisco Partners. iconectiv serves over 5,000 customers across various industries as a leading provider of number portability solutions and as a provider of core network and operations management, numbering and data exchange services in its main segments and with limited strategic synergies with the rest of Ericsson’s portfolio.

(1) Assuming an exchange rate USD – SEK of 10.56. The realized exchange rate will be determined upon completion of the transaction.

(2) Contribution to net profit including minority interests and impact on shareholder loans. Ericsson’s shareholder loan to iconectiv amounted to SEK 6.7 billion at year-end 2023.