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LM Ericsson Telephone Company (ERIC - Analyst Report) recently announced its intention to acquire the Telecom & Media subsidiary of France-based consulting company, Devoteam. This acquisition is in line with Ericsson’s strategy of expanding its IT capabilities.

Devoteam is a leading player in the information and communications technology consulting across Europe, Middle East and Africa. The company’s core competency lies in consulting and systems integration for operations and business support, service delivery platforms and applications, IP Multimedia Subsystems, IP and radio networks and TV. This deal also includes the acquisition of TV SmartVision operations.

This deal is also consistent with Devoteam’s 2015 strategic plan to become a niche player and focus more on the company’s value propositions.

Prior to this deal, Ericsson has been a key business partner for Devoteam in the United Kingdom and the Mediterranean regions. Therefore, this acquisition is expected to further strengthen the alliance between the two companies moving forward.

The deal is expected to be complete by second quarter of 2013 whereby all the 400 professionals from Devoteam’s subsidiary will be joining Ericsson. However, the closure is subject to regulatory compliance and procedures.

Ericsson seeks to gain expertise in complex, strategic and technical consulting assignments through the acquisition, which will enable it to enhance customer value. Apart from this, Ericsson has completed two major acquisitions of Telcordia and Conceptwave in the recent past.

Through the Telcordia acquisition, Ericsson has emerged as one of the most comprehensive providers of OSS/BSS solutions, which is a key element of any operator’s network. Moreover, with Conceptwave’s software solutions on board Ericsson strengthened its offering of software solutions to telecom operators.

Ericsson has a Zacks Rank #1 (Strong Buy) along with its peers’ Nokia (NOK - Analyst Report), Viasat Inc. (VSAT - Snapshot Report), Interdigital Inc. (IDCC - Snapshot Report) and Qualcomm (QCOM - Analyst Report), all of whom have a Zacks Rank #1 (Strong Buy).

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