8x8, a VoIP and cloud service provider focused mainly on business customers, is considering selling the company amidst a growing wave of consolidation in the telecom service provider industry segment.
Citing unnamed sources close to the company, Reuters reported that 8x8 has been consulting with Morgan Stanley to gauge the interest of other similar companies and private equity firms.
However, the sources added that there was no certainty the talks would continue or would result in a deal.
The sources asked not to be identified because the negotiations were confidential. 8x8 and Morgan Stanley did not immediately respond to Reuters’ requests for comment.
Investors responded favorably to the news, as 8x8’s shares rose nearly 14% and ended trading up 10% at $16.15 on Friday. This gives the company a market capitalization of close to $1.5 billion.
8x8 competes with a host of other VoIP-centric providers like RingCentral, Vonage and ShoreTel for business customers.
While 8x8 mainly focuses on providing business customer-based VoIP and cloud services like unified communications as a service (UCaaS), the service provider has branched out into other areas like call center software services.
ShoreTel and Vonage have been aggressively expanding their reach via acquisitions.
In 2015, ShoreTel acquired Corvisa, a provider of cloud-based communications solutions, for $8.5 million, enhancing its unified communications capabilities.
In order to bolster its UCaaS and cloud capabilities for business customers, Vonage has been no less aggressive. The service provider has purchased four companies, including Nexmo, iCore, SimpleSignal and Telesphere.
These acquisitions have enabled Vonage to stay on an equal footing with 8x8 in the growing UCaaS market segment.