Fresh off the closing of its purchase of Birch, Fusion has gone out and made another acquisition. The publicly traded cloud and network services provider has signed a definitive agreement to buy MegaPath.
These days MegaPath serves a mix of UCaaS, cloud connectivity/computing, security, and SD-WAN to the SMB marketplace. A few years ago as a larger company, MegaPath sold off its wholesale division to Global Capacity for $160M (now part of GTT) and its managed services business to GTT directly for $144.8M.
The purchase of MegaPath will cost Fusion some $71.5M, of which $10.0M may be in the company's common stock with the rest in cash coming from its current credit facility. For that price they will add $70M in annual revenue and $15M in adjusted EBITDA after cost synergies. Some 8,000 SMB customers will be added to the company's rolls along with 45 quota-bearing salesfolk.
Prior to its merger with Fusion, Birch was a very active consolidator in the marketplace, making dozens of deals before getting indigestion. Is Fusion planning to pick up where they left off? More likely this is, for now anyway, merely an opportunistic move for an asset that has been looking for a home, but time will tell. But with Fusion being publicly traded, we'll get to see whatever they do with more transparency at least.