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Ribbon Buys Edgewater for $50M Cash, Plus Stock & Payouts
Edgewater Networks revenue was $64 million in 2017 and $50 million in 2016, primarily derived from sales within the US.
June 25, 2018
2 Min Read
WESTFORD, Mass. – Ribbon Communications Inc., a global leader in secure and intelligent cloud communications, today announced that it has signed an agreement to acquire Edgewater Networks, a market leader in Network Edge Orchestration for the small and medium enterprise (SME) and Unified Communications (UC) market.
The acquisition is projected to result in Ribbon becoming the market share leader for enterprise Session Border Controllers (SBCs) and Network Edge Orchestration. This acquisition will allow Ribbon to offer its global customer base a complete core-to-edge product portfolio, unrivaled end-to-end service assurance and analytics solutions, and a fully integrated SD-WAN service.
The acquisition expands and enhances Ribbon’s solution offerings to its customers. The combined portfolio is expected to further strengthen the new Ribbon Protect UC security offering with voice and data intelligence from the enterprise edge and customer premises. With the ability to serve the core to the edge of the network, Ribbon will be equipped to provide an end-to-end connection to the enterprise and deliver unparalleled service assurance, security and monitoring capabilities.
Upon completion of the transaction, the Kandy Unified Communications as a Service (UCaaS) offering will also be enhanced with the ability to provide analytics and service assurance capabilities across the enterprise network edge. In addition, Ribbon’s Microsoft Skype for Business and Teams offerings will be expanded by Edgewater Networks Intelligent Edge solutions.
Overview of Edgewater Networks
Edgewater Networks is a private company, founded in 2002.
Edgewater Networks has more than 635,000 actively deployed edge devices and more than 20 million connected endpoints.
Edgewater Networks has approximately 80 employees and is headquartered in San Jose, California.
Transaction Details
At the closing of the merger agreement, Ribbon will pay Edgewater Networks shareholders an aggregate of $110 million, subject to customary post-closing net working capital and debt adjustments, comprised of: $50 million of cash (subject to customary net working capital adjustments) to be paid at the time of closing and to be funded through Ribbon’s existing credit facility; $30 million of deferred cash payments, to be funded through existing operating cash flows and completed within 18 months from the closing date; and $30 million of Ribbon common stock to be issued at the time of closing, not to exceed 5.2 million shares.The transaction is expected to close in the third quarter of 2018 and is subject to customary closing conditions and regulatory approvals.
Edgewater Networks revenue was $64 million in 2017 and $50 million in 2016, primarily derived from sales within the U.S. Over the past four years, Edgewater Networks has recorded annual double-digit sequential revenue growth.
Adjusted EBITDA1 was $4 million in 2017, a 98% increase compared to $2 million in 2016. The transaction is expected to be immediately accretive to Ribbon’s Adjusted EBITDA and Non-GAAP EPS post-closing.
Edgewater Networks Inc.
Ribbon Communications
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