Why Bandwidth (BAND) Is Buying Voxbone In A Deal Valued At Over $500 Million

By Dan Anderson ● October 12, 2020
  • Leading enterprise cloud communications company Bandwidth (NASDAQ: BAND) announced it has signed a definitive agreement to acquire Voxbone for an enterprise value of €446 million

Leading enterprise cloud communications company Bandwidth (NASDAQ: BAND) announced it has signed a definitive agreement to acquire Voxbone for an enterprise value of €446 million EUR (more than $520 million), which represents a multiple of approximately six times anticipated Voxbone 2020 revenue.

Voxbone — which has been majority-owned by Vitruvian Partners, a leading growth- and technology-focused investment firm based in London, UK since 2015 — is known for being a leading European-based communications platform and IP voice network. Since 2005, the company’s mission has been to simplify global communications for businesses by providing compliant, quality coverage that can be integrated with any contact center, conferencing platform, or voice application. Some of Voxbone’s customers include Uber, Zoom, Skype, CHR Hansen, 8×8, Dialpad, NICE inContact, and Aircall

With the combination, Bandwidth is going to play an even greater role in leading the transformation of enterprise cloud communications, thus enabling companies around the world to develop, launch, and hyper-scale applications and customer experiences using rich voice and text.

This year, enterprises are prioritizing voice, video, and text communications in their digital transformations. And at the center of this challenge is a critical need for a single worldwide cloud communications platform and network. With the addition of Voxbone’s intuitive user experience, software platform, and voice network spanning more than 60 countries, Bandwidth will provide global enterprises with a unified answer to the question of how to develop and deliver communications applications and experiences around the world.

And this creates a major opportunity for Bandwidth as IDC projects that worldwide spending on communications as a service to be $17.7 billion by 2024. The consideration to Voxbone shareholders will consist of cash in the amount of $400 million USD (approximately €338 million EUR). The remainder will be paid in Bandwidth Class A common stock (approximately €108 million EUR)2.

The deal is expected to close on October 31, 2020. And following the closing, Voxbone will operate under the Bandwidth brand.

Morgan Stanley & Co. LLC served as exclusive financial advisor to Bandwidth. And Latham & Watkins serving as legal counsel. Goldman Sachs International served as exclusive financial advisor to Voxbone and Vitruvian with Freshfields Bruckhaus Deringer serving as legal counsel.

In conjunction with the announcement of the Voxbone acquisition, Bandwidth also announced it is expecting that it will report third quarter revenue and non-GAAP EPS that are above the guidance ranges provided on July 30. And Bandwidth will report its financial results for the three months ended September 30, 2020 on October 29th after market close.

Bandwidth management is also going to discuss additional details of the acquisition and the anticipated financial impact on the business during its third quarter earnings conference call on October 29, 2020.

KEY QUOTE:

“We are bringing together leading domestic and international enterprise cloud communications platforms to supercharge global cloud communications for our customers. Bandwidth’s deep US presence and Voxbone’s world-wide platform across 60+ countries will serve enterprises in countries representing 93% of global GDP. Today’s announcement accelerates our international strategy by several years. Our current and future customers will benefit from using a unified software platform, network, and team to serve people around the world. Voxbone’s platform is trusted by approximately 900 enterprises, including brands like Uber, Zoom, 8×8 and Skype. We’re thrilled to welcome this pioneering team to Bandwidth and congratulate them on their tremendous growth.”

— David Morken, Co-founder, Chairman and CEO of Bandwidth