(Adds analyst comment, background)
March 7 Swedish mobile telecom gear maker
Ericsson on Tuesday said private equity firm
Francisco Partners will invest $200 million for a 16.7 percent
stake in its iconectiv subsidiary, valuing the business at
around $1.2 billion.
* Ericsson said iconectiv, part of its media segment, is
built on assets from Telcordia, which Ericsson acquired in 2012
for $1.15 billion.
* iconectiv is based in the United States, has around 560
employees and sells services such as number portability to
telecom operators, an Ericsson spokesman said.
* "Having a U.S. partner as co-owner strengthens our ability
to further grow iconectiv's business and create value in a
dynamic market," Per Borgklint, head of Ericsson's media
segment, said in a statement.
* "This move both shows some value creation while also
reducing the risk for Ericsson iconectiv to lose out the
important U.S. number portability deal," said Handelsbanken
analyst Daniel Djurberg.
* Ericsson's media segment stands for around 5 percent of
Ericsson's total sales, which were 223 billion Swedish crowns
($24.7 billion)in 2016.
* Ericsson said private equity firm Francisco Partners will
invest $200 million to acquire a 16.7 pct ownership at an
implied total valuation of iconectiv of approximately $1.20
* Ericsson said the $200 million will be transferred to
Ericsson as a dividend, which it expects to receive in Q3 2017.
* Ericsson said the transaction has no material impact on
Ericsson group income.
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($1 = 9.0085 Swedish crowns)
(Reporting By Olof Swahnberg; editing by Johannes Hellstrom)