Cloud services and Microsoft Exchange hosting provider Intermedia announced on Tuesday that it has entered into a definitive merger agreement to acquire cloud-based communications solutions provider Telanetix for $55 million.
Telanetix, who does business as AccessLine, provides cloud-based voice services directed mainly at the small and medium business segment. According to its website, AccessLine has scaled its technologies – which include its digital business phone system, conferencing, and virtual receptionist services — to “meet the needs of entrepreneurial-minded small businesses,” and has worked with more than 100,000 business customers including Sun Microsystems, American Express and IBM.
According to a study published last year by Insight Research, SMBs dominate the VoIP landscape, and account for 41 million of the total market size for business telephone lines of 72 million (in the US presumably).
Like Intermedia, AccessLine sells its products through direct and indirect channels. It will be interesting to see how the channels are streamlined to support the integrated service portfolio. In an interview with the WHIR last year, Intermedia president Mike Gold said that channel partners account for about half of its business, and the company has always credited its partners with being responsible for a large chunk of its growth.
“This transaction enables us to further execute on our Office in the Cloud vision of an integrated suite of cloud services for small and medium-sized businesses and the channels that serve them,” Phil Koen, chairman and CEO of Intermedia said in a statement. “With AccessLine, we are gaining an outstanding team of about 100 talented individuals with significant, successful experience developing and delivering next-generation hosted voice services that will meet the rapidly evolving communications needs of our customers and partners.”
Upon closing of this transaction, Intermedia said it will become one of the largest providers of cloud voice and hosted PBX services for SMBs in the US. The new communication services will be managed through its proprietary HostPilot Control Panel.
The transaction will not only round out Intermedia’s service portfolio offering for SMBs, which include hosted Exchange 2013, but also add a team of telecommunications professionals who bring decades of industry and operational experience which Intermedia said will be leveraged through the integration of the two businesses.
Intermedia offered VoIP telephony prior to this announcement, and so far it is unclear how the AccessLine products will be wrapped into its existing offering.
According to the press release, a portion of the all-cash transaction is expected to be financed through a bank syndicate led by Silicon Valley Bank, Royal Bank of Canada, Churchill Financial, Citibank, and CapitalSource Bank. Additional equity commitments have been provided by Intermedia’s existing investors including Oak Hill Capital Partners.
Intermedia said the transaction is expected to close within six months, but the deal is subject to customary conditions to closing, including federal and state regulatory approvals.
Talk back: What do you think of Intermedia’s acquisition? Do you think the AccessLine services will be complementary to its existing small business cloud services? Let me know in a comment.