Broadsoft and Sylantro Sitting in a Tree

The rumors that first appeared on FierceVoIP turned out to be the real deal. VoIP application provider broadsoft announced today that it is buying competitor sylantro. While both companies are private and so are the terms of the deal, it does appear to have been a one-sided affair. Broadsoft apparently will assume Sylantro’s debt and is buying the customer base for a song and maybe a dance but not much more. It was an open secret that Sylantro was running low on cash and with the credit markets in their current state of panic, there wasn’t much choice.

It has been clear for quite some time now that BroadSoft has been winning the war anyway, Sylantro has struggled to keep up and other competitors such as Nortel have other problems these days. But had the economic crisis not arisen, I suspect that this opportunity would not have arisen. We will see this sort of thing across the internet, voice, and data sectors if it continues, rather than last time when we mostly saw Chapter 11 filings first. Why? Because this crisis isn’t about a bad telecom services market, any pressure the sector is feeling is less than most actually, and hence the assets have value to those with the resources to back it up.

BroadSoft made a great deal here, it was truly no-brainer. Taking out Sylantro like this is a far better option than letting it die, because the customer list they are acquiring is impressive (AT&T and Qwest amongst around four dozen others) and there was always the risk that someone else with deep pockets might pick up the assets in bankruptcy and become the next challenge. Their already very competitive market position just got better.

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Categories: Mergers and Acquisitions · VoIP