5 days ago by Khali Henderson, Editor in Chief, PHONE+
Seeking to quell rumors, VoIP providers Broadvox LLC, Dallas, and Cypress Communications Inc., Atlanta, issued a statement Friday confirming their intentions to merge. Because of the timing, few details of the transaction were disclosed.
David Byrd, Broadvox's vice president of marketing and sales, told PHONE+ the companies planned to give themselves another 30 days before determining details, including such things as structure, leadership and branding strategies. Because the companies are privately held, Byrd would not disclose revenues for the combined entity, but said Cypress and Broadvox are roughly the same size, so combining would create a company with twice either provider's revenue. In terms of employees, Cypress has 200 to Broadvox's 110, Byrd noted. Pending shareholder and regulatory approvals, the company expects the deal to close in 60-90 days.
In a press statement, Broadvox Chairman and CEO Andre Temnorod, attempted to put the brakes on the hype machine: "While we look forward to finalizing the transaction, it's important for our customers, partners and other stakeholders to know that it is 'business as usual' at both Broadvox and Cypress Communications."
So what do we know about the deal? For one thing, the companies have synergistic product line, addressing carrier, enterprise and SMB VoIP segments. Both offer hosted IP telephony products. Cypress offers a hosted unified communications services targeted at enterprises. Broadvox, meanwhile, launched in April its GO!VBX virtual PBX service (formerly GO!Hosted) for SMBs. Broadvox hosted PBX services are in addition to an existing SIP trunking portfolio it has been selling since 2007. It also has been offering wholesale SIP origination and terminating services to carriers for a decade.
Because there is no cross-over in the product lines, the companies did not expect its customers to be impacted by the merger. "Customers using Cypress' C4 IP product and those using Broadvox's GO!VBX will see no changes in their current feature sets, phones or technology platforms," the companies said in a press statement.
Between them the companies have more than 10,000 business customers (6,500 from Cypress and 4,000 from Broadvox) and about 300 wholesale carrier customers, Byrd said. In addition, Cypress will gain access to Broadvox's network backbone for direct origination and termination of voice traffic. Broadvox has more than 90 PoPs with major switching centers in Dallas, New York, Atlanta, Los Angeles, Denver, Miami and Seattle. Broadvox also operates a NOC in
Cleveland.
Cypress also operates a nationwide layer 2 MPLS VPN with PoPs and local staff in 29 metro markets, including Seattle, San Francisco, Los Angeles, Orange County, San Diego, Phoenix, Denver, Dallas, Houston, New Orleans, Tampa/Orlando, Miami, Birmingham, Atlanta, Nashville, Chicago, Indianapolis, Minneapolis, Washington D.C., Pittsburgh, Philadelphia, New York, Hartford, Stamford and Boston.
The companies have different go-to-market strategies. Cypress largely relies on direct sales while Broadvox uses an indirect sales channel. "We plan to marry the two models ..., but we want to minimize conflict," Byrd said.
"We ultimately will end up with software and services from Cypress that will strengthen our existing product offering and will broaden the line, so our channel should be very excited about that," Byrd said. "The ability for members of our channel to aggressively pursue large enterprise customers with a proven hosted platform and product suite – that should be of interest to them as well."