Atlanta-based Birch Communications, a cloud and managed services vendor, is set to acquire Cbeyond, an IT provider for SMBs, for nearly $323 million.
The combined entity will have approximately $700 million in annual revenue and approximately 200,000 business customers located in all 50 states, the District of Columbia, Canada and Puerto Rico.
The strategy of Birch Communications is to tap SMBs and assist them during their growth phase. The acquisition will enable Birch Communications to strengthen its presence in both SMB and enterprise markets.
In addition, the acquisition creates a nationwide IP-based network with approximately 10,000 fiber route miles, over 500 fiber-lit buildings, 570 collocations and 5 data centers.
Cbeyond stockholders will receive between $9.97 and $10.00 per share in cash.
At $9.97 per share, the purchase price represents a premium of 56.8 percent over Cbeyond’s stock price on November 5, 2013, the trading date before Cbeyond announced its process to explore strategic alternatives, and a premium of 40.8 percent over the closing price of Cbeyond’s stock on Thursday April 17, 2014, said Birch said.
Birch Communications made 20 acquisitions in the past.
Vincent M Oddo, president and CEO of Birch, said: “The combined company will have a nationwide IP-network with a significant fiber infrastructure, an extensive data center presence in multiple markets, and a relentless focus on providing superior customer service.”
The Cbeyond transaction is the latest in a history of 21 acquisitions that Birch has completed in recent years.
Birch Communications provides IP-based communications, cloud and managed services to businesses in all 50 states, the District of Columbia, Canada and Puerto Rico. Birch services include: voice, broadband, Internet access, hosted services, managed services, wireless voice, wireless data and many other communications, cloud and managed services.