Telefonaktiebolaget LM Ericsson (publ) (OM:ERIC B) entered into an agreement to acquire Vonage Holdings Corp. (NASDAQ:VG) for $5.7 billion on November 22, 2021. The enterprise value for the transaction is $6.2 billion. The acquisition will be conducted by means of a merger agreement through which Ericsson will acquire all of Vonage's outstanding shares at an all-cash price of $21 per share. The merger consideration represents a premium of 28% to Vonage's closing share price on November 19, 2021 of $16.37 per share, and a premium of 34% to the volume-weighted average share price over the 3 months to November 19, 2021 of $15.71 per share. The acquisition will be financed through Ericsson's existing cash resources. On completion, Vonage will become a wholly owned subsidiary of Ericsson and will continue to operate under its existing name. It will be reported as a separate segment in Ericsson accounts. In the event, that the merger agreement is terminated in certain specified circumstances by Vonage, Vonage will pay $200 million to Telefonaktiebolaget. In the event, the merger agreement is terminated in certain specified circumstances by Telefonaktiebolaget, Telefonaktiebolaget will pay $200 million to Vonage. As of May 20, 2022, the termination date has been extended to August 22, 2022. There are no plans to change Vonage's name and brand. Vonage will operate under the Vonage brand within Ericsson. Vonage's employees will remain with the company and the Vonage Chief Executive Officer Rory Read will join the Executive Team of Ericsson, reporting to Chief Executive Officer, Börje Ekholm. Vonage is headquartered in Holmdel, New Jersey in the United States with 2,200 employees throughout the United States, EMEA and APAC.

Completion of the transaction is subject to Vonage shareholder approval, regulatory approvals including from CFIUS, the expiration of the waiting period applicable to the consummation of the Merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended and other customary conditions. The consummation of the merger is not subject to any financing contingency. The merger agreement was approved unanimously by the Board of Vonage. The merger agreement was approved by the Board of Telefonaktiebolaget. The HSR Act waiting period expired on January 3, 2022. As of February 9, 2022, Shareholders of Vonage Holdings approved the transaction. As of June 28, 2022, the merger has cleared all other requisite foreign and US regulatory approval requirements. As of July 15, 2022, the transaction has received clearance from the Committee on Foreign Investments in the United States (CFIUS). The transaction is expected to close within the first half of 2022. As of June 28, 2022, the transaction is expected to close by the end of July 2022. As of July 15, 2022, the transaction is expected to close no later than July 21, 2022. The transaction is expected to be accretive to EPS (excluding non-cash amortization impacts) and free cash flow before M&A from 2024 onwards.

Qatalyst Partners LP acted as financial advisor and fairness opinion provider to Vonage Holdings. Michael J. Aiello, Matthew Gilroy, Megan Pendleton, Paul Wessel, Jeffrey Osterman, Devon Bodoh, Stuart Goldring and Greg Featherman, Eric Behl-Remijan, P.J. Himelfarb, Corey Chivers; Shawn Cooley, John Scribner and Neil Rigby of Weil, Gotshal & Manges LLP acted as legal advisors to Vonage Holdings. Ethan A. Klingsberg and Joseph K. Halloum, Mena Kaplan, Lori Goodman, Christine Lyon, Brock Dahl, Aimen Mir, Christine Laciak, Megan Rissmiller, Rafique Bachour, Meredith Mommers, Nabeel Yousef, Claude Stansbury, Brian Rance, Kyle Lakin, Martin Hutchings, Michael Levitt, Taryn Zucker, Olivia Radin and Tim Harkness of Freshfields Bruckhaus Deringer US LLP acted as legal advisors to Telefonaktiebolaget. Vonage has retained MacKenzie Partners, Inc. to assist in the solicitation process. Vonage will pay MacKenzie Partners, Inc. a fee of approximately $50,000 plus reimbursement of certain specified out-of-pocket expenses. Goldman Sachs International acted as financial advisor to Telefonaktiebolaget. Qatalyst Partners provided Vonage with financial advisory services in connection with the proposed Merger for which it will be paid approximately $73 million, $0.25 million of which was payable upon the execution of the engagement letter and $5 million of which was payable upon the delivery of its opinion (regardless of the conclusion reached in the opinion), and the remaining portion of which will be paid upon, and subject to, the consummation of the merger.

Telefonaktiebolaget LM Ericsson (publ) (OM:ERIC B) completed the acquisition of Vonage Holdings Corp. (NASDAQ:VG) on July 21, 2022. Vonage common stock has ceased trading and will no longer be listed on the Nasdaq Global Select Market.