Yesterday rumors surfaced of another potential M&A in the cloud communications space. BroadSoft is supposedly considering its strategic options, with Jefferies helping sift through options including a sale of the company.
BroadSoft itself has been a consolidator for VoIP and UC technology providers over the years. Most recently they bought VoIP Logic last autumn, and the year before they acquired mPortal and Intellinote.
BroadSoft's underlying software for voice-related services powers a pretty wide swath of the industry's UC and cloud communications services. At one point their revenues were primarily from licensing software, but these days it's mostly from delivering their technology via a wholesale subscription SaaS model.
It doesn't seem like this potential sale is driven by need, but by opportunity. The cloud communications space is hot right now and valuations are pretty attractive. The company has marketcap of just under $1.5B, including a boost of 10% yesterday from the rumors of a potential sale. Total revenues were $341M in 2016.
Potential buyers would probably either be from private equity or from larger vendors with an interest in adding depth to their software side. If I had to put my money on an outcome, it would be that a private equity group steps up to the plate.
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