Fusion Announces Definitive Agreement to Acquire Birch Communications' Cloud and Business Services Business

Fusion (NASDAQ:FSNN) has announced it will acquire Birch’s Cloud and Business Services business, including its customers, operations and infrastructure.
As quoted in the press release:

The transaction is expected to close by the end of 2017, subject to customary approvals and closing conditions.

The combination is expected to create one of the largest cloud services providers in North America, with more than 150,000 business customers and a 100% Internet Protocol-based network, including 30 data centers, 31,000 fiber route-miles of network, and metro fiber assets in 11 major markets. The combined customer base is expected to demonstrate strong fundamentals, with monthly recurring revenue comprising approximately 87% of total revenue. In addition, the combined company will have significant opportunities for growth by cross-selling and upselling to existing customers with a comprehensive suite of cloud and business services.

The acquisition will not include Birch’s legacy consumer and single-line business customers, which have lower profitability and Average Revenue Per Customer (ARPU) as well as higher churn rates.

The scale that this acquisition will bring to Fusion further accelerates the company’s single-source cloud strategy. By delivering its fully integrated cloud solutions over a single platform, Fusion is able to solve the increasingly complex challenges of migrating to the cloud. Fusion offers customers a more efficient integration of cloud services and provides greater control over the end-to-end user experience, thereby avoiding the “finger pointing” often encountered when using multiple service providers.

“This acquisition is a major milestone in Fusion’s targeted and disruptive strategy of becoming the leading single-source cloud services provider to business and enterprise customers,” said Matthew Rosen, Fusion’s Chief Executive Officer. “Customers increasingly demand an end-to-end experience that is reliable as well as efficient and innovative. Fusion is well positioned to provide these services having been first-to-market to pursue this strategy, and can now do so with increased scale and resources.”

Click here to read the full press release.