magicJack VocalTec buys Broadsmart for USD40m

VoIP cloud-based communications company magicJack VocalTec Ltd. (NASDAQ: CALL) has acquired the assets of North American Telecommunications Corporation d/b/a Broadsmart , a leading hosted UCaaS provider for medium-to-large multi-location enterprise customers, the company said.

The purchase price for the acquisition is USD40 million, consisting of USD38 million in cash and USD2 million in ordinary shares of magicJack. There is also a USD2 million earnout tied to the achievement of 2016 revenues.

Broadsmart has a track record of designing, provisioning and delivering complex Unified Communications as a Service (UCaaS) solutions to blue chip corporate customers on a nationwide basis. It has expertise in servicing enterprises with hundreds to thousands of locations. The business has generated approximately USD13 million in revenues and USD4.6 million of EBITDA in 2015, an EBITDA margin of over 35 percent.

The two founders of Broadsmart, Todd Correll and Tom Tharrington, will remain with the business as CEO and President, respectively, of Broadsmart Global, Inc., a newly formed wholly-owned subsidiary of magicJack VocalTec, Ltd.

The acquisition brings together an optimal mix of resources and capabilities across the two firms. magicJack acquired Broadsmart to diversify beyond its core business into UCaaS, targeting high end SMB and enterprise customers, and to realize synergies by leveraging magicJack´s proprietary low cost infrastructure. Broadsmart will benefit from magicJack resources to deliver additional managed services and solutions to its customers and channel partners.

Q Advisors, a global TMT investment banking boutique, acted as exclusive financial advisor to Broadsmart in connection with the transaction.

Broadsmart provides cloud-based communications with a go to market approach to continually refine product lines, provide high value, high quality, and increased efficiencies so that Cloud Services (Hosted IP and SIP/IP Trunking) can be successfully delivered to midsized to enterprise class customers nationwide.

magicJack VocalTec Ltd. (Nasdaq: CALL) provides cloud communications with its magicJack device, now in its fifth generation.