Fusion Telecommunications International (News - Alert), a provider of UC and cloud solutions, is planning the right strategy for growth. The company, through a wholly-owned subsidiary, acquired Network Billing Systems, a UC and cloud services provider.
As indicated, the deal was signed for an aggregate purchase price of $19.6 million which consists of $17.75 million in cash, $600,000 evidenced by subordinated promissory notes payable to the sellers, and $1.25 million in restricted common stock of Fusion.
The addition of NBS (News - Alert) allows Fusion to rapidly scale its portfolio of cloud solutions, enabling the company to accelerate its organic growth plans while providing a robust platform for additional acquisitions.
“The acquisition adds a very experienced and highly qualified management team and staff to Fusion's own experienced organization. Fusion also gains advanced back office systems that will drive operating and service delivery,” Matthew Rosen, chief executive officer at Fusion, said in a statement.
The combined company is expected to generate between $65 and $70 million in annual revenue, and achieve positive adjusted EBITDA (earnings from continuing operations before interest, taxes, depreciation and amortization) in the beginning of 2013.
Established in 1984 and headquartered in New Jersey, NBS provides a wide variety of voice, data, and Internet services to a diverse customer base that includes residential, small business, and large corporate clients. The company also offers Voice over Internet Communications Exchange, a fully featured VoIP platform providing hosted and trunk replacement voice services and cloud services.
The acquisition adds over 5,000 small, medium and large business customers to Fusion's Corporate Services business segment. The transaction also includes the acquisition of certain assets owned by NBS' affiliated company.
Upon the completion of the integration with NBS, Fusion expects to achieve approximately $2 million in annual cost synergies, and additional revenue growth from the cross-sale of the companies' combined products and services.
Jonathan Kaufman, founder and chief executive officer of NBS, will be joining Fusion to lead the combined corporate services segment under the NBS brand.
Kaufman said he believes in this winning combination and expects this acquisition to position the company to emerge as the leading unified communications and cloud services provider in the industry.
In another release, Fusion announced that it has closed on $22.5 million of financings, composed of $6.03 million in equity, and $16.5 million in term debt.
Edited by Brooke Neuman