Ribbon Communications agreed to acquire Edgewater Networks, a privately-held company based in San Jose, California that specializs in Network Edge Orchestration for the small and medium enterprise (SME) and Unified Communications (UC) market.
Under the deal, Ribbon will pay Edgewater Networks shareholders an aggregate of $110 million, subject to customary post-closing net working capital and debt adjustments, comprised of: $50 million of cash, $30 million of deferred cash payments, and $30 million of Ribbon common stock to be issued at the time of closing, not to exceed 5.2 million shares.
Edgewater Networks, which was founded in 2002 and currently has about 80 employees, says it has more than 635,000 actively deployed edge devices and more than 20 million connected endpoints.
It product portfolio includes a hybrid network edge orchestration solution; a family of EdgeMarc IP-to-IP Session Border Controllers, EdgeMarc Multi-Service Gateways, and EdgeProtect Unified Communication platforms; an EdgeView Service Control Center (SCC) that provides visibility to all voice and data traffic and real-time alerts/alarms for remote troubleshooting and management; and an Edgewater SD-WAN solution.
Edgewater's revenue was $64 million in 2017 and $50 million in 2016, primarily derived from sales within the U.S. Over the past four years, Edgewater Networks has recorded annual double-digit sequential revenue growth. Adjusted EBITDA was $4 million in 2017, a 98% increase compared to $2 million in 2016.
Ribbon said the acquisition will make it the market share leader for enterprise Session Border Controllers (SBCs) and Network Edge Orchestration. The combined portfolio is expected to further strengthen the new Ribbon Protect UC security offering with voice and data intelligence from the enterprise edge and customer premises.
“This transaction demonstrates how we are delivering on our strategic objectives and extending our market reach,” said Fritz Hobbs, President and Chief Executive Officer of Ribbon Communications. “The combination of Ribbon Communications and Edgewater Networks creates a best-in-breed, complete platform that extends our leadership position in the SBC, cloud UC, security and analytics markets.”
“The customer footprint of our combined organization is unmatched in the marketplace,” said David Norman, Chief Executive Officer of Edgewater Networks. “The combination of Ribbon and Edgewater Networks will allow us to better serve customers globally and accelerate our pace of innovation in the UC and SD-WAN markets.”
