Windstream has reached a $228 million agreement to acquire regional competitive provider Broadview Networks, enhancing the service provider’s unified communications (UC) solutions for small and medium business (SMB) customers.
Rye Brook, New York-based Broadview established as a cloud-based unified communications solutions to SMBs. The company offers a broad suite of cloud-based services under the OfficeSuite UC brand. Broadview has also continued to align with popular office applications like OfficeSuite UC for Microsoft Dynamics 365, one of 16 software applications it offers.
Although this is a much smaller acquisition when compared with that of EarthLink, which Windstream only recently completed, the Broadview deal will give the service provider more cloud capabilities in markets that prefer managed solutions.
Tony Thomas, president and CEO of Windstream, said in a release that the acquisition will “enable us to leverage Broadview's experienced salesforce and cloud operations across our national footprint.”
By being purchased by Windstream, Broadview and its customers will be able to gain advantage of a larger facilities-based network and new capabilities like SD-WAN and Ethernet services for its customer base.
Windstream said it expects to realize approximately $30 million in annual operating synergies within two years of completing the acquisition. It also expects the Broadview purchase will improve its balance sheet by reducing leverage through realization of synergies and will be accretive to free cash flow in the first year.
The boards of companies unanimously approved the transaction. Broadview shareholders holding a majority of the company's shares also approved the transaction by written consent.
Houlihan Lokey and Jefferies are serving as financial advisers, while Willkie Farr & Gallagher LLP is serving as legal adviser to Broadview in the transaction.
After meeting customary closing conditions, including clearing necessary federal and state regulatory approvals, Windstream expects the acquisition to close in the third quarter of 2017.