KeyOn Communications Holdings announced
the asset acquisition of Voice-Over-IP (VoIP) operations of the entities doing
business as CommX.
KeyOn Communications largest and controlling shareholder is California Equity LLC, an entity
controlled by Patrick Soon-Shiong. Soon-Shiong is a physician, scientist and
philanthropist who has made clear his intention to develop a comprehensive
health information highway system” throughout the United States.
It is expected that CommX
will add over $3 million in annualized revenues and will immediately make a
meaningful contribution to EBITDA.
CommX has experienced strong annual
organic growth over its history and averaged 15 percent over the 12 months
ended 2010. For the first quarter ended March 31, 2011, on a pro forma basis
after giving effect to the two acquisitions completed in the quarter and
CommX’s results for the quarter, KeyOn would have revenues of approximately
$3.4 million and a narrowed Adjusted EBITDA loss of $270,000.
Founded in 2002 by
telecommunications industry executives, Tampa-based CommX
provides hosted VoIP services to businesses and residential customers through
direct distribution as well as third-party wholesale and agent partners,
including Internet service providers (ISPs), phone system equipment vendors,
and system integrators.
The VoIP services are provided using
redundant softswitch architecture with switching capabilities provided by VoIP
application software leader, Broadsoft.
The strategic acquisition of CommX
provides KeyOn with a vertically integrated platform to upsell VoIP services to
its more than 20,000 wireless broadband subscribers.
Moreover, acquiring the CommX
operations will give KeyOn ownership of an intelligent, VoIP softswitch,
creating higher overall margins in selling VoIP services. Management
anticipates that KeyOn should experience a lower cost of new customer
acquisition in selling VoIP given its existing relationship with potential
customers as their broadband provider.
We are extremely excited about
offering VoIP services on our own VoIP infrastructure. We are fortunate to be
acquiring a well-run organization with very talented employees. We intend to
immediately upsell VoIP services across our networks, including our new
networks funded by our $10.2 million American Recovery and Reinvestment act
award. And, we plan to build on CommX’s historical customer and sales growth by
expanding sales through the addition of new wholesale partners and by
continuing to support those selling the services today,” said Jonathan Snyder,
president and CEO, KeyOn Communications.
We believe that the acquisition of
these VoIP assets is a compelling vertical integration strategy that
complements our wireless broadband operations, Rural UniFi acquisition program
and broadband stimulus initiatives. By owning best-of-breed VoIP technology, we
not only ensure the highest quality of service across our platform but also own
100 percent of the margin generated from this rapidly growing voice service
offering,” added Snyder.
According to Infonetics Research, in
2010 VoIP services revenue grew to $50 billion, up from $35 billion in 2008, a
21percent annual growth rate. Infonetics also forecasts the combined
residential/SOHO VoIP services market will grow to $74.5 billion in 2015.
By Telecomlead.com Team
editor@telecomlead.com
