Apax grabs arm from Ericsson

Direct-sales and services division sold for £327m.

Ericsson Enterprise has announced it will sell off its direct-sales and services arm to investment group Apax Partners Funds for $480m (£327m).

The deal will see the direct-sales division of Ericsson Enterprise, which operates in 18 countries and has 2400 staff, become an independent reseller as a newly formed company, Enterprise Solutions.

Ericsson will retain a 20 per cent share in the new company and will work together with Apax to turn Enterprise Solutions into an independent sales channel and develop it as a network integrator for voice, data and mobility products.

Tony Weaver, managing director of distributor Norwood Adam, said: "As an Ericsson partner, we have been aware of this development for some time.

"Enterprise Solutions will target user companies with more than 500 handsets. Unlike before, it will now leave the companies with less than 500 handsets alone."

This will have a mixed impact on resellers, Weaver claimed. "There will be competition for the bigger customers, but there will now be a gap in the small corporate market for resellers," he said.

Frederic Boone, director of marketing at Ericsson Enterprise, said the company will still be signing up new partners.

"Enterprise Solutions will be one of our channels straight to the users, but we will need more than one partner in some markets," he said.

The new company would not get preferential treatment from Ericsson, Boone claimed.

Enterprise Solutions will specialise in integrating enterprise mobility products throughout Europe and has already secured partnerships with other manufacturers, including Rockwell and Extreme Networks.