Ericsson sells federal unit

Private equity group creates Oceus to meet broadband wireless demand

 Ericsson Federal has thrown off the limitations of being a foreign-owned company and has been acquired by a U.S.-based private equity group.

Tailwind Capital has acquired the company, now called Oceus Networks, and it will be entirely independent from its now former parent Ericsson of Stockholm, Sweden. Terms of the deal were not disclosed. The transaction closed Dec. 31.

It’s newfound independence has been in the works for several years, said Douglas Smith, president and chief executive officer of Oceus, which will be based in Reston, Va. As president of Ericsson Federal he had been working to create an independent company since March 2008.

“It was a long and complex process,” he said. The company had to be structured properly for the deal and the right buyer had to be found, Smith added.

“It took longer than we expected, but we have ended up where we knew we would,” he said.

As an independent company Oceus will not operate with the restrictions that came with being foreign-owned, Smith said. One of those restrictions included not being able to talk to customers as they developed requirements for projects.

The majority of Oceus’ customers are in the Defense Department and some intelligence agencies. It’s independence will help Oceus expand its customer base for broadband wireless solutions.

The company is bringing 4G wireless technologies to the tactical environment, where the demand for real-time video is growing, Smith said. “Lives depend on getting video data in real time,” he said.

As part of the sale Oceus will be the exclusive channel for Ericsson products to the Defense Departrment.

“But we are not a mere reseller,” Smith said. Oceus has its own research and development operation that will take Ericsson’s commercial products and modify them for use by the military, he said.

The exclusive agreement with Ericsson is long term and can be extended. Smith would not say how many years the agreement would be in place but that “it’ll last beyond my career.”

About the Author

Nick Wakeman is the editor-in-chief of Washington Technology. Follow him on Twitter: @nick_wakeman.

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