The FINANCIAL — Ericsson (NASDAQ:ERIC) on March 23 announced it has entered into an agreement to divest its TEMS-branded products business, consisting of tools for air interface monitoring and radio network planning, to Ascom. The agreement involves the transfer of about 300 employees of which around 180 are based in Sweden.
The transaction is expected to close in June, 2009. With the divestment, Ericsson is refining its leading Professional Services portfolio to focus more purely on the services business.
Ericsson's TEMS-branded products business provides tools for air interface monitoring and radio network planning. These solutions facilitate planning, implementation and optimization of networks. The TEMS brand is widely recognized as the industry leader and its products are supplied to the world's top 20 wireless service operators. The purchase price is CHF 190 million, excluding net of assets and liabilities.
With the divestment, Ericsson is refining its leading Professional services portfolio, to focus more purely on the service business. With its strong focus on telecom services it has become of limited strategic value to Ericsson to keep the TEMS products business within the company.
Ericsson believes that this transaction will allow the TEMS business to further realize its growth potential, while adding significant competence, well-known and industry leading products and a sizable customer base to Ascom. This will also be a positive step for Ericsson's customers, partners and employees, reaping the benefits from this divestment.
The completion of the transaction is subject to customary closing conditions. JP Morgan acts as sole financial advisor to Ericsson in the transaction.
