A Boise tech company just sold for $1 billion, creating several ‘newly minted millionaires’
The Swedish telecom firm Ericsson announced Friday that it will acquire the Boise-based company Cradlepoint, a provider of wireless internet products, for $1.1 billion.
“There will be quite a few new local millionaires from this transaction,” said Pat Sewall founder and former CEO of Cradlepoint. He left the company in 2012.
Sewall said that during his time at the company, every technical employee was offered equity in the company.
“The company’s philosophy from the day I founded it was to bring all the people along, because it takes the entire team to create a really successful company,” he said by phone.
Cradlepoint, whose headquarters are in downtown at the Boise Plaza building, now employs about 650 people worldwide. It also has a research and development center in Silicon Valley, plus offices in the United Kingdom and Australia.
The company will remain a standalone subsidiary of Ericsson with its headquarters in Boise, operating under the Cradlepoint brand. Ericsson says it will also retain Cradlepoint’s existing employees and keep George Mulhern as CEO.
Jay Larsen, president of the Idaho Technology Council, said the Ericsson acquisition may be the largest deal ever secured by a homegrown Boise company.
“It really shows the strength of the tech ecosystem in the Treasure Valley,” he said by phone.
Expect to see Cradlepoint grow in Boise, Larsen added.
“They think this will be a great place to continue to build on top of Cradlepoint’s innovation,” he said.
Cradlepoint was founded in 2004 by Pat Sewall who later brought on co-founders Ryan Adamson and Gary Oliviero. The company started out creating routers that converted cell signals into Wi-Fi hot spots. Their focus later turned to providing routers and adapters, as well as associated software, that allows businesses to connect wirelessly over 4G and 5G networks.
Cradlepoint’s sales in 2019 totaled about $136 million, according to a news release.
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Ericsson said Cradlepoint is the market leader in its field and would help Ericsson in capturing a greater market share in the 5G space.
The deal is expected to close in the fourth quarter of 2020. Ericsson will pay for Cradlepoint in cash.
The acquisition could make waves across Boise’s tech space.
Other recent acquisitions of tech companies in Boise — like Intuit’s 2017 purchase of TSheets or Microsoft’s 2006 acquisition of ProClarity — mostly benefited those companies’ founders and early investors, said Jeff Reynolds, a Boise tech and marketing consultant.
Because Cradlepoint allowed its employees to gain equity in the company, the benefits of a sale “has the possibility for positive impact spread throughout the community,” Reynolds said by phone.
Some of Cradlepoint’s earliest investors were also local, such as Highway 12 Ventures, a Boise-based venture capital firm headed by Mark Solon and Phil Reed; the Gem State Angel Fund; and nearly a dozen angel investors.
Sewall now invests in tech companies through the Trolley House Group. He said he hopes that some of the “newly minted millionaires” will do what he did: start a new company here in town.
“You can build a billion-dollar company in Boise, Idaho,” he said.
This story was originally published September 18, 2020 at 12:17 PM.
