Light Reading exclusively reported just over a year ago that privately-held Genband Inc. and public company Sonus Networks Inc. (Nasdaq: SONS) were in merger talks. One of the sticking points -- according to one of our sources at the time -- was who would lead the combined company. (See Genband & Sonus Deep in Merger Talks?)
The companies now say that long-standing Sonus CEO Ray Dolan will head the combined company. David Walsh, CEO of Genband, will head up the Kandy business, currently Genband's cloud communications-platform-as-a-service (CPaaS) for service providers and enterprises, which will become a division of the combined company. Current Genband CFO Daryl Raiford will take on that role at the combined entity.
"Together, Sonus and GENBAND will be better positioned to enable network transformations to IP and cloud-based networks for communication service providers and enterprise customers worldwide, with a broader and deeper global sales footprint, increased ability to invest in growth, more efficient and effective R&D, and a comprehensive real-time communications product offering," the companies said in a release on the merger. (See Sonus & Genband Agree to Merge.)
Genband and Sonus also share some significant customers, notably AT&T Inc. (NYSE: T)
The pair say the combined company is "expected to realize annual cost synergies of $40 million to $50 million by the end of 2018." As we reported last year, the two companies have some notable product overlaps, particularly in the session border controller (SBC) and media gateway lines.
The companies are currently projecting EBITDA of approximately $140 million for its fiscal year 2020 .
Shareholders of Genband and Sonus are anticipated to each own approximately 50% of the combined company, upon the closing of the deal. The boards of both companies have already approved the agreement. The deal is expected to close in the second half of 2017, following shareholder approval.
Sonus is trading up by 5.9% at $8.25 on Wednesday morning.
— Dan Jones, Mobile Editor, Light Reading