Ericsson buys CENX, consolidating Ottawa telecom R&D outposts

Ericsson

A U.S.-based software firm with deep roots in Ottawa has been acquired by Swedish telecommunications giant Ericsson.

The Stockholm-based multinational announced Tuesday it has agreed to buy 100 per cent of the shares in CENX, a firm headquartered in New Jersey that operates a major research and development facility in downtown Ottawa. Ericsson is one of CENX’s largest customers and has held a minority stake in the U.S. firm since 2012.

Terms of the deal, which is still subject to regulatory approvals, were not disclosed.

Founded in 2009, CENX has become a major player in the field of lifecycle service orchestration, helping mobile, wireline and cloud data service providers manage reams of big data to provide reliable services more quickly to their customers. In 2015, the company placed 18th on Deloitte’s Technology Fast 500 list of North American firms.

Ericsson said in a statement that CENX’s technology will help it unleash the full potential of emerging ultra-high-speed 5G networks, particularly in the area of network slicing. Network slicing refers to the creation of multiple “virtual” wireless networks on top of a shared physical infrastructure, allowing networks to be customized for various applications, devices and customers.

“By bringing CENX into Ericsson, we can continue to build upon the strong competitive advantage we have started as partners,” Mats Karlsson, the head of Ericsson’s operations support systems, said in a news release issued Tuesday. “I look forward to meeting and welcoming our new colleagues into Ericsson.”

According to the release, CENX employs 185 people, who will now join Ericsson. Neither company provided further details on how those employees will be integrated into Ericsson’s workforce or what roles CENX’s executives will play.

Ericsson Canada employed more than 930 people at its Kanata office on Terry Fox Drive in 2017, according to OBJ’s Book of Lists. Ericsson officials did not reply to emailed questions from OBJ by late Wednesday afternoon.

“Ericsson has been a great partner, and for us to take the step to fully join Ericsson gives us the best possible worldwide platform to realize CENX's ultimate goal – autonomous networking for all,” CENX chief executive Ed Kennedy said in a statement on Tuesday. “We look forward to seeing our joint capability add great value to the transformation of both Ericsson and its customers.”

When the veteran tech executive joined the company as CEO in June 2017, CENX said it employed more than 250 people in North America, Europe and Asia – 210 of them at its R&D hub in Centretown.

Kennedy, who came to CENX after stints at multinationals including Alcatel-Lucent, told OBJ at the time a big part of his role would be to build on the company’s strong core of customers and channel partners such as Ericsson.

“We’ve got a lot of good accounts that we’re working with globally,” he said. “We’ve got a lead against our competitors, so I think we’re in a pretty good spot. The focus now will be to get the product out and just scale organically, scale with partnerships.”

Although most of CENX’s customers were based in Europe and the United States, Kennedy said the firm was also looking to grow its market share in South America and Asia.

“The population down there is a young population; there’s a lot more internet traffic, a lot of mobile traffic, which causes a lot more back pressure on the networks,” he told OBJ. “We’ll just have to figure out what’s the best way to go attack it.”