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Genband & Sonus Deep in Merger Talks?

Dan Jones
5/11/2016

Word on the street has it that Genband and Sonus are in advanced talks to become one company focused on a software networking future.

Light Reading has heard from sources in the financial community that Genband Inc. and Sonus Networks Inc. (Nasdaq: SONS) have had a potential deal on the table for several months but haven't nailed down all the operational details yet. The deal would likely value Sonus at $600 million or thereabouts. (See Does Anyone Want Sonus? and Sonus Buys Itself an SDN Story.)

"Generally, we don't comment on rumors," a media representative for Genband said on Wednesday afternoon. Sonus hasn't responded yet.

The motivation would be to create a company that could scale to meet the challenges of moving to a virtualized world of networking software over the next few years. Meanwhile, both companies are seeing declining orders in their traditional VoIP software and hardware space, thanks to increased competition from third-party over-the-top communications apps. (See Sonus Stock Crashes on Lost Orders and Genband Acquires fring to Help CSPs Go OTT.)

Genband and Sonus have some definite product overlaps, particularly in the session border controller (SBC) and media gateway lines. Both companies claim that their SBCs are fully software, which could also make integration easier if they do close a deal. (See Sonus Claims Virtual SBC Bragging Rights, Sonus Virtualizes Entire Product Line and A Tale of 2 Genbands.)

Genband and Sonus also share some major customers, such as AT&T Inc. (NYSE: T). The Genband buyout of Nortel's old carrier VoIP business in 2010 helped it to win at Ma Bell. (See Genband Wins Nortel's Carrier VoIP Biz.)

Gaining growth and new market momentum has historically been a pattern for Genband. The company was founded in 1999, since 2006 it has bought Aztek Networks, BayPackets, Cedar Point Communications, fring, NextPoint Networks,Tekelec's switching unit, and uReach, as well as Nortel, Nokia, NSN and Siemen's units.

One source familiar with both companies tells us that it is not the first time that Genband and Sonus have talked about combining. The companies have had talks a couple of times before.

Another source says that the impasse to getting a deal nailed down is deciding which CEO would run the combined company. Genband CEO David Walsh joined in 2013 and put forward ambitious plans to transform the company into a software company. Sonus CEO Ray Dolan has been at the helm since 2006. (See Pulling the Strings at Genband.)

— Dan Jones, Mobile Editor, Light Reading

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pcarew
pcarew
5/23/2017 | 12:34:03 PM
Well it's about time :-)
Just saw the news this morning.

Of course the 'Devil is always in the details', but this is a positive move forward.
DanJones
DanJones
5/23/2017 | 10:30:29 AM
Re: Any update.....It has now been almost a year
Why yes, yes there is:

 

https://www.genband.com/media-center/press-releases/sonus-and-genband-combine-create-global-leader-real-time-communications

 

Story soon.
pcarew
pcarew
4/17/2017 | 12:30:19 PM
Any update.....It has now been almost a year
Well, it all went very quiet. Sonus are no better off, arguably worse if you look at the stock price.

 

Could this deal come back to life?
pcarew
pcarew
5/16/2016 | 2:04:18 PM
Could this be the path to public company status for GB?
GB has long dangled an IPO carrot. Could this be the eventual path to public company status....that is, a reverse merger with Sonus? Or would they take Sonus private?
Ray@LR
[email protected]
5/12/2016 | 5:16:38 AM
Is such consolidation inevitable?
The fallout from such a merger could be somewhat brutal in terms of the teams and disruption to business but is it inevitable that such combinations will happen, particularly involving companies that have ongoing attrition of their legacy business units?

What's really important these days is that the cultures of companies combining need to be compatible and that could be a big determining factor in what happens with Genband and Sonus.
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