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Cloud and Managed Services Provider Birch Communications to Acquire Cbeyond for $323 Million in Cash

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logo-WHIRThis article originally appeared at The WHIR.

Birch Communications has agreed to buy Cbeyond for around $323 million in cash, according to an announcement by the Atlanta-based companies on Monday. The acquisition is the result of a six-month strategic review process in which Cbeyond evaluated a range of alternatives in addition to a sale.

Birch Communications provides communications, cloud and managed services, which will align with Cbeyond’s cloud and data services, communications and IT services for small and mid-sized businesses. Last year, Cbeyond expanded its service portfoloio to include TotalAssist Services, a strategic set of services including cloud migration and management services for SMB customers.

The transaction will create combined $700 million in annual revenue and approximately 200,000 business customers, and 5 data centers.

Cbeyond stockholders will receive between $9.97 and $10.00 per share in cash. At the lower end, the purchase price represents a premium of 56.8 percent over Cbeyond’s stock price on Nov. 5, 2013, the trading data before Cbeyond announced it was exploring strategic initiatives, according to a statement.

The transaction has been approved by both companies board of directors, and is expected to close within 6 months.

“This transaction will create a nationwide communications and technology services powerhouse and significantly advances our strategy to drive top-line revenue growth by enhancing the premier communications, cloud and managed services that are available to our business customers,” 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 deal is the latest acquisition for Birch Communications, which has acquired 21 companies in recent years.

“The additional revenue scale, customer density, network reach, and product offerings will allow us to comprehensively meet the evolving, long-term needs of our business customers,” Oddo said. “We’re making this investment to serve our business customers in the best way possible for many years to come.”

This story originally appeared at http://www.thewhir.com/web-hosting-news/cloud-managed-services-provider-birch-communications-acquire-cbeyond-323-million-cash

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