Vonage shares jumped nearly 25% in premarket trading

Vonage shares jumped nearly 25% in premarket trading.

Mobile telecoms equipment maker Ericsson said on Monday it had agreed to buy cloud communications firm Vonage for $6.2 billion.

The deal was the Swedish firm's biggest in years and follows its acquisition of U.S.-based wireless networking company Cradlepoint for $1.1 billion in 2020.

"The merger agreement was approved unanimously by the Board of Vonage," Ericsson said in a statement.

"The transaction builds upon Ericsson's stated intent to expand globally in wireless enterprise, offering existing customers an increased share of a market valued at $700 billion by 2030."

Vonage had sales of $1.4 billion in the 12-month period to Sept. 30 2021, with a margin on adjusted earnings before interest, tax and depreciation (EBITDA) of 14% and free cash flow of $109 million.