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Entries in Deal Advisor (60)

Friday
Aug212015
DateFriday, August 21, 2015 at 3:48PM

Vonage Announces Acquisition of iCore Networks

Vonage Holdings Corp (NYSE: VG) announced on Thursday, August 20, that it had entered into an agreement to acquire iCore Networks, Inc. (iCore) for approximately $92.00 million.  The acquisition is expected to expand Vonage’s Unified Communications-as-a-Service (UCaaS) for businesses. 

Transaction Facts

  • Vonage is a leading provider of cloud communications services for consumers and businesses.
  • iCore is a provider of UCaaS for businesses and aims to merge a customer’s UC and cloud needs.
  • Alan Masarek, Vonage’s CEO, believes that the acquisition presents a strategic fit that will complement Vonage’s expansion of its UCaaS business.
  • Transaction will be financed through cash from Vonage’s balance sheet, as well as the company’s revolving credit facility.
  • Deal is expected to close by Q3 2015.

Strategic Considerations

  • Acquisition gives Vonage an additional 85,000+ new customer seats with monthly ARPU per customer of approximately $4,000.
  • Upwards of 60% of iCore’s revenue is derived from customers with more than 100 seats.
  • Vonage and iCore use the same call processing platform, which should allow for an easy integration of customer bases.
  • Vonage expects its annual recurring cost synergies to be more than $5.0 million in 2016.
  • Transaction price represents an estimated 1.3x iCore’s 2015 estimated revenues, which implies expected revenues to be approximately $70.8 million for 2015.

JSICA’s Take

  • Acquisition, along with prior acquisitions over the last year, demonstrates Vonage’s commitment in penetrating the small to medium business (SMB) market.
  • Currently, Vonage’s business segment accounts for roughly 22% of its revenues with the segment generating a monthly ARPU of $44.22 per seat.  ICore’s high monthly ARPU per seat of $68.62 will be a nice addition.  

 

AuthorJared Taylor | Comments Off | | | Print ArticlePrint Article
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Tuesday
Aug112015
DateTuesday, August 11, 2015 at 3:59PM

Shenandoah Telecommunication to Acquire NTELOS

On Monday, August 10th, Shenandoah Telecommunications Company (NASDAQ: SHEN) announced that it will acquire NTELOS Holdings, Corp. (NASDAQ: NTLS), also known as nTelos, for approximately $586.00 million.  As part of the deal, certain assets will also be exchanged with Sprint (NYSE: S). The deal is subject to regulatory approval and is expected to close by the beginning of 2016.

Valuation Analysis and Deal Metrics

Transaction Facts

  • ShenTel will finance the acquisition with a new credit facility. 
  • nTelos shareholders will receive $9.25 per share in cash at closing.   
  • Deal has already been approved by both company’s Board of Directors and is awaiting shareholder approval. 
  • ShenTel’s affiliate agreement with Sprint will be revised.  
  • nTelos spectrum licenses will be transferred to Sprint.
  • 291,000 Sprint customers will become ShenTel Sprint affiliate customers in addition to the 281,500 customers ShenTel picks up from nTelos.
  • ShenTel acquires $130 million net operating loss carryforwards, of which it expects to utilize all but $20 million.

Strategic Considerations

  • Transaction overlaps areas of existing ShenTel cable, fiber, wireless and wireline networks.
  • Overlapping should allow ShenTel to eliminate roughly 148 redundant cell sites, as well as leverage fiber and tower assets.
  • Combination of a ShenTel's local market focus along with the Sprint brand could lead to an increase subscribers.
  • Increased access and scale of Sprint’s shared services could help to increase operating efficiencies. 
  • Sprint will be adding value to the transaction, partly due to $252.00 million in reduced affiliate agreement fees over the next 5 to 6 years. 


JSICA’s Take

  • Transaction increases Shenandoah’s Mid-Atlantic footprint while providing ShenTel a regional area to deploy LTE services and utilize its fiber assets for backhaul. 
  • Acquisition will approximately double ShenTel’s covered POPS, wireless subs, revenue, and OIBDA, before taking into account any potential synergies realized.
  • Strengthens ShenTel’s affiliate relationship with Sprint by revising its current agreement and extending the term by five years to 2029.

AuthorJared Taylor | Comments Off | | | Print ArticlePrint Article
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Friday
Aug072015
DateFriday, August 7, 2015 at 10:43AM

Onvoy Announces Acquisition of Broadvox

Onvoy, LLC announced on Tuesday, August 4th its acquisition of Broadvox, LLC.  Onvoy is a leading provider of wholesale telecommunication services.  Broadvox is a CLEC that focuses on providing its customers wholesale VoIP services.  

Transactions Facts

  • Deal is expected to close by the beginning of September.
  • Broadvox serves a client base of approximately 500 VoIP, telecommunications carriers, and SMS-focused ISVs.
  • Broadvox is one of the largest suppliers of VoIP innovative, origination, and termination messaging services in the United States.

Strategic Consideration

  • Transaction will enhance coverage and employee base, which means more opportunities for customers.
  • Combined company will reach approximately 5,000 rate centers and serve 1,000 carriers across the United States.
  • Combined company will be able to meet the communication needs of numerous service and carrier providers within the United States.

JSICA’s Take

  • Economies of scale will give the combined company the tools needed for future expansion and growth.
  • Transaction should provide numerous synergies for the combined entity, partly due to an impressive customer portfolio.
  • Deal adds to the consistent consolidation of the VoIP industry over the last several years.
AuthorJared Taylor | Comments Off | | | Print ArticlePrint Article
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Thursday
Aug062015
DateThursday, August 6, 2015 at 10:37AM

Digital Realty Acquires Telx

On Tuesday, July 14th, Digital Realty Trust Inc. (NYSE: DLR) announced that it had reached an agreement to acquire Telx Holdings, Inc. from private equity firms ABRY Partners and Berkshire Partners for approximately $1.886 billion. 

 Valuation Analysis and Deal Metrics

Transaction Facts

  • Deal will immediately enhance Digital Realty’s data center footprint.
  • Telx managed approximately 1.3 million square feet of data center space across the United States, as of March 2015.
  • The deal will be funded partly through a public offering of 1.5 million shares priced at $68.00 per share.
  • Telx’s 1Q 2015 annualized operating results - revenues of $334 million, core EBITDA of $122 million and monthly recurring revenue of $114 million. 
  • Transaction is expected to close by the end of 2015.

Strategic Considerations

  • Digital Realty’s colocation footprint is expected to double as a result of the transaction.
  • 11 of the 20 data centers that Telx manages are leased from Digital Realty.
  • Telx’s colocation and interconnection capabilities should be a good fit combined with Digital Realty’s expansive wholesale platform.
  • Combination will allow Digital Realty to provide greater flexibility and options to its customers.

JSICA’s Take

  • Deal should allow Digital Realty to be able to provide a larger selection of colocation and offer interconnection services to a well-established customer base in major metro areas like New York and Silicon Valley.
  • Throughout the past year, Digital Realty has continuously been adding to its presence in the data center and cloud services market.
AuthorJared Taylor | Comments Off | | | Print ArticlePrint Article
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Thursday
Jul022015
DateThursday, July 2, 2015 at 1:22PM

Level 3 Announces its Acquisition of Black Lotus

On Wednesday, July 1st, Level 3 Communications (NYSE: LVLT) announced that it had acquired Black Lotus, a private company that provides Distributed Denial of Service (DDoS) mitigation services.  The acquisition helps to enhance Level 3’s commitment of providing leading security product capabilities. 

Transaction Facts

  • Level 3 will acquire the outstanding equity of Black Lotus in an all-cash transaction.
  • Financial terms of the transaction were not disclosed.
  • Level 3 Communications is a provider of communications services to enterprise, government and carrier customers.
  • Level 3 launched their own DDoS service during the beginning of 2015.

Strategic Considerations

  • Transaction adds additional capabilities to Level 3’s current DDoS service.
  • Acquisition of Black Lotus gives Level 3 a “proxy-based” DDoS mitigation service.
  • Chris Richter, Senior VP of Managed Security Services at Level 3 recently said that “Black Lotus’ proxy and behavioral technologies, combined with their experienced team of DDoS experts, perfectly complements Level 3’s DDoS mitigation and threat intelligence capabilities.”

JSICA’s Take

  • The DDoS Mitigation Service that Level 3 offers should improve partly thanks to Black Lotus’ advanced behavioral analytics technology. 
  • It is clear that Level 3 has placed an emphasis on growth and efficiency in regards to the security of their customers’ operations.
  • Enhances Level 3’s commitment to the security of its network in an effort to drive customers to its network.
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