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Sonus & Genband Finally Combine to Form $745M Company

Dan Jones
5/23/2017

Sonus and Genband finally revealed the details of a long-anticipated merger Tuesday morning, a move that values the combined company at $745 million.

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

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Kevin Mitchell
Kevin Mitchell
11/1/2017 | 9:04:45 AM
Nortel would have been better...
And so it is Ribbon Communications

Nortel would have been better with all the 80s and 90s nostalgia zeitgeist.
Kevin Mitchell
Kevin Mitchell
11/1/2017 | 9:04:44 AM
Nortel would have been better...
And so it is Ribbon Communications

Nortel would have been better with all the 80s and 90s nostalgia zeitgeist.
kq4ym
kq4ym
6/8/2017 | 8:13:49 AM
Re: Name?
Well at least "Soband" or "Genus" will get some savings along the way as noted "Genband and Sonus also share some significant customers, notably AT&T Inc." Looks like there's lots of possibilities for the new name on this merger with so many vowels between the two.
DanJones
DanJones
5/24/2017 | 5:41:08 PM
Re: Name?
Woah! yeah, interesting idea.
Kevin Mitchell
Kevin Mitchell
5/24/2017 | 5:34:28 PM
Re: Name?
If Sonus office is the new HQ, it's moving north. The name Nortel could be brought back. Or even Northern Telecom! 
DanJones
DanJones
5/24/2017 | 5:30:55 PM
Re: Name?
Genous!
Kevin Mitchell
Kevin Mitchell
5/24/2017 | 5:25:44 PM
Re: Name?
Definitely could spawn a new curse: Son of a Gen!
DanJones
DanJones
5/24/2017 | 1:07:56 PM
Re: Name?
GenSon? 

Bandus?

SonBand?

 

They all sound a bit like "Side effects may include..."
OldStyle
OldStyle
5/23/2017 | 5:09:18 PM
Where is the Old LR When You Need It?
The LR of days gone by would be providing some much-needed comedic relief here.  Like, what do you get when you combine two, 21 year old companies that have never posted one quarterly profit?  Or, Help, someone is trying to land the Hindenburg on the Titanic!
softwizard
softwizard
5/23/2017 | 4:20:44 PM
Re: Name?
Norqua?
Page 1 / 2   >   >>
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