Inteliquent Acquired (and other UC M&A)

Inteliquent is an interesting bird. It is one of the largest VoIP/SIP providers in North America, primarily known for VoIP orig/termination and DIDs. They cover about 94% of the rate centers. It is a combination of Neutral Tandem, Tinet, APNI, Broadvox, Layered Comm., Acrobits, BetterVoice, Voyant and Onvo. It was owned by PE firm GCTR. At one time parts of this company were public and parts were owned by Zayo. Now a European (Swedish) company (Sinch) has acquired it for $1.1B in cash. The funny thing about this transaction is that my email was blowing up as we tried to figure out what companies this included.

Note that Sinch lays claim to mobile & customer engagement, instead of CPaaS. You can’t get a billion dollars if you say you are a UCaaS or CPaaS company. You have to be talking about outcomes like customer engagement. Twilio is the biggest CPaaS provider, but that’s not their tagline or mentioned in PR.

Being a technology provider – CPaaS, UCaaS, broadband, CCaaS, what-have-you-aa-S – isn’t nearly as important as the business outcome your customers achieve when applying your technology.

It has been an active two months with over 100 deals in our space (telecom, MSP, IT) so far. The big ones are as follows:

Sangoma is acquiring Star2Star. The valuation is $437M, based on $79M in revenue of which 80% is recurring. FYI.. Star2Star produced over $14.7 (USD) million of adjusted EBITDA and adjusted net income of $2.6 million (USD).  As of September 30, 2020, Star2Star had total assets of $35M (USD) and liabilities of $61 million. The deal calls for $105M in cash and the rest in stock. S2S CEO and co-founder, Norm, and the VC partner (NewSpring Capital) will hold about a 12% stake in Sangoma. Sangoma also owns Digium/Asterisk/Switchvox; FreePBX; VoIP Supply; Dialogic; and E4. Sangoma Technologies Corporation is publicly traded on the TSX Venture Exchange (TSX VENTURE: STC).

Momentum Telecom acquired another Cisco/Broadsoft customer in Altus. Altus is based in Nashville. They are just one of the 400+ providers powered by the old Broadsoft softswitch that are trying to adjust to a world where Cisco owns the softswitch and wants it all to be Webex and SaaS. So a CSP kind of becomes an MSP, just managing the service that Cisco is providing.

BCM One, which acquired Arena One (a BSFT shop) in 2019, picked up Netsapiens’ white-label partner, Skyswitch. BCM One also bought LincLogix. BCM One is owned by a PE firm.

Alianza (a softswitch white label provider) is acquiring CounterPath for $25.7 Million. Counterpath is mostly known for its softphone Bria, but also provides Bria Teams and a cloud contact center product. CounterPath is publicly traded on the NASDAQ (symbol: CPAH) and the Canadian TSX Exchange (symbol: PATH).

RealPage bought Whitesky. Whitesky mainly sold to MDU and MTU like dorms, apartments, hotels and adult living communities.

PE firm, Renovus Capital Partners has acquired Inflow.

One of my old clients, Primus, was acquired by a fellow Canadian provider, Distributel. Primus had a complicated history as well with many owners over the years including Birch then Fusion (when Birch and Fusion merged). Primus is a Broadsoft shop.

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