Ericsson has announced the sale of its US subsidiary, iconectiv, to Koch Equity Development for SEK 10.6 billion ($1 billion). This deal, subject to regulatory approval, is expected to conclude in the first half of 2025.
The sale is poised to yield Ericsson a one-time gain of around SEK 8.8 billion ($800,000) in earnings. Based in New Jersey, iconectiv specializes in number portability solutions and data exchange services. As a leading number portability administrator in ten countries, including the United States, this subsidiary has a substantial market presence.
Ericsson originally acquired iconectiv (then known as Telcordia) in 2011 for $1.15 billion. The company’s expertise lies in managing the systems that allow users to retain their phone numbers when switching carriers. Despite generating around $1 billion in revenue for Ericsson in 2023, iconectiv’s focus on niche services like number portability and data exchange didn’t align well with Ericsson’s core business areas.
According to Ericsson, the sale resulted from the lack of synergy between iconectiv and the company’s primary business ventures. The subsidiary’s inclusion in the portfolio didn’t offer the strategic fit Ericsson sought, prompting the decision to sell.
It’s noteworthy that iconectiv has over 5,000 customers across various sectors. Since 2017, it has been co-owned by Francisco Partners. Under Koch Equity Development’s ownership, iconectiv is expected to continue growing and expanding its market presence.
