After raising $ 690 million from SoftBank in December to make the acquisition, Sweden-based cloud communications company SINCH has followed through on its strategy in that department. Today the company announced that it was acquiring Intelligent, an interconnection provider for voice communications currently owned by private equity firm GTCR, for $ 1.14 billion in cash.
And to finance the deal, Sinch said it has raised SEK8.2 billion – $ 986 million – from Handsbanken and Danske Bank, along with other facilities.
The deal will provide Sinch – a competitor to Twilio with messaging, calling and marketing (engagement) APIs to build its services in mobile applications and other services – an important foothold in the US market.
Intelligent – a profitable company with 500 employees and revenue of $ 533 million, gross profit of $ 256 million, and Ebitda of $ 135 million in 2020 – to serve both other service providers and enterprises in the largest voice carrier in North America Claims to be one of Its network connects to all major telcos, covering 94% of the US population, with more than 300 billion minutes of voice calls and 100 million phone numbers delivered to customers.
The business is publicly traded in Sweden – where its market cap exceeds $ 13 billion (just 108 billion Swedish krones) – and the acquisition raises the question of whether the company plans to further establish a financial presence in the US , For example a list there. We have asked the company what its next steps might be and will update this post when we learn more.
In a statement, Oscar Werner, Sinch CEO, stated, “Becoming a leader in the American voice market is key to establishing Sinch as the premier global cloud communications platform.” “Intelligent is one of the largest and most in-demand voice customers in the US supported by a fully owned network across the US with superior quality. Our combined strengths in voice and messaging provide a unique place to grow our business and provide a better customer experience for our customers. “
Inteliquen serves two main areas, Communications-Platform-A-Service (CPaaS) to provide voice calling and phone numbers for API-based services; And more legacy infrastructure-as-a-service (IaaS) products such as telecon to off-net call termination (when a call is assigned from one carrier to another) and toll-free number. Although almost half of the total turnover is – without thinking – CPaaS business is growing at twice the rate of IaaS.
Its business, like many others, is relying more on communications services, as they are seeing each other as a lesser person – last year saw an increase in usage. (Revenue adjusted without the Kovid lift, it noted, would be $ 499 million, so is still healthy.)
As for Sinch, the business of providing coming tools to developers since exiting retail in 2014, it has been on an acquisition roll to bulk up its geographic reach and services it provides to customers.
The deals include, recently, buying ACL and SAP’s digital interconnect business in India for $ 250 million for $ 70 million. Deals – combined with Twilio’s own companies Sendgrid for $ 2 billion and last year’s segment for $ 3.2 billion, both with a large trend of consolidation in the digital (API-based) communications space as well as the giant Speak for the value contained within it.
Intelligent itself was controlled by GTCR based in Chicago, much like Intelligent private equity before hand. According to Pitchbook, its most recent funding came from Oaktree Capital in 2018 for just $ 19 million.
Interestingly, Intelligent itself has been an investor in innovative communication startups, participating in Series B for Gypships, a startup that is building better ways to integrate mobile messaging tools into landline services.
“We are excited about the tremendous opportunities that unlock this combination, we can expand the services our customers provide. In a statement, Ed O’Hara, Intelligent CEO, truly connects us with our leading voice offering with Sinch’s global messaging capabilities for leadership in a rapidly developing market.