26 May 2017

Left: Sonus president Raymond Dolan will become the combined company’s CEO. Right:  GENBAND CEO and chairman David Walsh will oversee the Kandy business and assist with the integration of the businesses.

Sonus and GENBAND have agreed to merge and claim their combination will create a leader in next-generation communications networking. 

Each company’s shareholders will each own around 50 per cent of the new company. Based on the closing price of Sonus’ common stock on 22 May and estimated net cash at the time of closing, the transaction values the combined company as approximately $745 million (around £580m).

With global operations, US-headquartered Sonus specialises in securing cloud and real-time communications. GENBAND is also based in the US and claims it has more than 800 customers in 80 countries using its carrier and enterprise network transformation and real-time communications solutions.

The transaction combines Sonus’ real-time communications, virtualisation, cloud-based SIP and 4G/VoLTE solutions and security initiatives with GENBAND’s network modernisation, UC, and mobility and embedded communications systems.  

The firms say their merger will give them increased scale and market reach across products, customers and geographies. They claim they will be better positioned to enable transformations to IP and cloud-based networks for service providers and enterprise customers worldwide.

The combined company is expected to realise annual cost synergies of $40 million to $50 million by the end of 2018, and to drive solid cash flow from operations in the first year after closing. 

Raymond Dolan, president and CEO of Sonus, will become the combined company’s CEO. David Walsh, CEO and chairman of GENBAND, will oversee the Kandy business, a division of the combined company and currently GENBAND’s cloud communications PaaS for global service providers and enterprises. Walsh will also assist with the integration of the businesses.  

GENBAND CFO Daryl Raiford will retain his job title and function with the combined company. The remainder of the executive team will be named from the current leadership of both companies, and will be announced prior to closing.

The board of directors of the combined company will have five representatives designated by GENBAND and four designated by Sonus. Richard Lynch, current chairman of Sonus and former CTO at Verizon will serve as chairman of the mrged firm The full board line-up will be announced in the near future.

“Together, Sonus and GENBAND create a market leader in real-time communications with enhanced capabilities to support our customers’ move to cloud-based solutions,” said Dolan.

“The transaction is expected to generate significant near- and long-term value for shareholders, who we believe will benefit from their ownership in a combined company with increased scale and resources to invest in and accelerate each company’s growth initiatives.”