Genband & Sonus Deep in Merger Talks?
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