After completing a strategic review, Ericsson announced the sale of a majority stake of its Media Solutions division to One Equity Partners.
The private equity firm will pay an undisclosed sum to acquire 51% of the Swedish vendor’s Media Solutions unit, which makes the MediaFirst cloud-based video platform for pay TV and OTT service providers. The deal is expected to close in the third quarter. At that time, Media Solutions employees and contractors will transition to a new independent company being set up by Ericsson and One Equity.
Separately, Ericsson decided to hold on to broadcast and media services operation Red Bee media.
“With the performance improvements that we are currently being implemented, we see future upsides to both businesses. We are confident that the direction we announce today will enable us to create the best long-term value, for both our customers and our shareholders,” Ericsson CEO Börje Ekholm said in a statement.
Ericsson is seeing increased momentum in 5G, including in North America, but it continues to struggle as the demand for LTE gear dwindles, reporting its fifth straight quarter of losses while announcing a shakeup in the executive ranks.
The company reported sales decreased by 12% in the fourth quarter, with sales decreasing by 10% for the full year 2017 in all segments. Its net loss was $2.4 billion for the fourth quarter.