Windstream Communications agreed on April 13 to purchase New York-based telecom company Broadview Networks for $227 million, says a report from CRN. Officials state the agreement will yield $30 million in additional annual revenue.
Broadview, a known pioneer of cloud-based office phone systems, will broaden Windstream’s expansion in the cloud market. With more than 86 percent of small to midsized businesses (SMBs) considering a switch to cloud-based unified communications in the near future, many telecomm providers have ramped up efforts to improve cloud-based office phone offerings in 2017.
Windstream’s primary motivation for the sale involves OfficeSuite UC™, a proprietary unified communications system that uses the cloud to provide employees with a secure singular portal for calls, emails, business apps, and collaborative software.
OfficeSuite UC claims to target three dimensions of Windstream’s portfolio in particular: security, scalability, and productivity. By keeping sensitive and mission-critical data off-site, companies supposedly won’t be as vulnerable to hacking and data breaches. Cloud technology also allows SMBs to scale more easily, since they don’t have to pay heavy upgrade fees on hardware or replace servers entirely when they hire more employees. Thirdly, OfficeSuite UC increases productivity by allowing a business to continue operating during weather than would normally close a company. Employees also enjoy the ability to work remotely or collaborate with co-workers even away from the office.
The deal emerges as a victory for Broadview Networks, a company that exited Chapter 11 bankruptcy just six years ago in 2011. At the time, Broadview showed a $115.1 million deficit to the Manhattan U.S. Bankruptcy Court—a result of the company’s status as a traditional competitive local exchange carrier (CLEC) at the time. Broadview’s revenue skyrocketed following its conversion to cloud technology, and the recent deal with Windstream is the latest victory for both the cloud communications industry and Broadview Networks.
As a result of the recent acquisition, Broadview’s stock increased 428 percent on April 13 to $6.60 per share; Windstream’s stock has remained constant, per the CRN report.