Sweden-based cloud communications company Sinch has followed through on its strategy in that department. The company announced that it is acquiring Inteliquent, an interconnection provider for voice communications in the U.S. currently owned by private equity firm GTCR, for $1.14 billion in cash.
And to finance the deal, Sinch said it has raised financing totaling SEK8.2 billion $986 million from Handelsbanken and Danske Bank, along with other facilities it had in place.
The deal will give Sinch a competitor to Twilio with a range of messaging, calling and marketing (engagement) APIs for those building communications into their services in mobile apps and other services a significant foothold in the U.S. market.
Inteliquent a profitable company with 500 employees and revenues of $533 million, gross profit of $256 million, and Ebitda of $135 million in 2020 claims to be one of the biggest voice carriers North America, serving both other service providers and enterprises. Its network connects to all the major telcos, covering 94% of the U.S. population, with more than 300 billion minutes of voice calls and 100 million phone numbers handled annually for customers.
Sinch is publicly traded in Sweden where its market cap is currently at $13 billion (just over 108 billion Swedish krona) and the acquisition begs the question of whether the company plans to establish more of a financial presence in the U.S., for example with a listing there. We have asked the company what its next steps might be and will update this post as and when we learn more.
“Becoming a leader in the U.S. voice market is key to establish Sinch as the leading global cloud communications platform,” said Oscar Werner, Sinch CEO, in a statement. “Inteliquent serves the largest and most demanding voice customers in America with superior quality backed by a fully-owned network across the entire U.S.. Our joint strengths in voice and messaging provide a unique position to grow our business and power a superior customer experience for our customers.”
Inteliquent provides two main areas of service, Communications-Platform-as-Service (CPaaS) for API-based services to provide voice calling and phone numbers; and more legacy Infrastructure-as-a-Service (IaaS) products for telcos such as off-net call termination (when a call is handed off from one carrier to another) and toll-free numbers. These each account for roughly half of the total business although unsurprisingly the CPaaS business is growing at twice the rate of IaaS.
Its business, like many others focusing on services for people who are relying more on communications services as they are seeing each other in person less saw a surge of use this past year, it said. (Revenues adjusted without Covid lift, it noted, would have been $499 million, so still healthy.)
“Sinch is focused on delivering unparalleled customer experiences at scale and with the investors we have today, we believe we have the financial muscle for both extensive product development and M&A that is needed to take advantage of a consolidating global market as we continue building the leading CPaaS company,”