Some interesting vendor consolidation was announced yesterday. Ribbon Communications says it has entered into an agreement to acquire ECI Telecom Group for $460M or so in cash and stock.
Ribbon, which was formed via the merger of Sonus and GENBAND, focuses primarily on software related to VoIP and UC. ECI's portfolio includes both optical transport gear and software for SDN and NFV. The combination will have a rather more diverse range of products and solutions, and I'll be curious to see what direction they go in.
The deal will cost $324M in cash plus 32.5M shares of common stock. ECI shareholders will also get $31M in proceeds from the sale of the company's real estate assets. The combined company will be worth some $900M, according to the release. Ribbon will fund the deal via about $500M in debt.
Meanwhile, Ribbon also revealed a change in leadership. CEO Fritz Hobbs has left the company, effective today. EVP Steven Bruny and EVP/CTO Kevin Riley will take the helm as co-CEOs and co-Presidents while the board of directors starts a search for a new permanent CEO.
The combination of the acquisition and the CEO resignation didn't go over too well with the markets, and the company's stock was down 25% yesterday. The deal is expected to close in Q1 of 2020.
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