Lingo Announces Definitive Agreement To Acquire Select SMB Customers From Fusion

February 12, 2019

Transaction adds SMB scale to Lingo while increasing ARPU and Gross Margin

Lingo Communications, LLC (“Lingo”), a leading global cloud and managed service provider dedicated to serving the SMB, Carrier and Consumer markets, announced today that on February 4, 2019 it entered into a definitive agreement to acquire select SMB customer assets from Fusion Connect, Inc. (“Fusion”), in an all-cash transaction.

Lingo Highlights:

  • Lingo to acquire select Fusion SMB customers located in 30 states.  The final closing is expected in Q2 ’19 following customer and regulatory notifications.
  • Will add approximately 4,000 customers to Lingo’s high growth SMB segment; will increase SMB segment ARPU by approximately 10%; and will increase SMB segment gross margin by approximately 3%.
  • Expected to be significantly accretive to Lingo’s Adjusted EBITDA immediately upon closing, leading to approximately $28 million in annual pro forma unlevered free cash flow in 2019.

Lingo will continue to operate its nationwide cloud communications network as well as its North American FG-D network focused exclusively on the SMB, Carrier and Consumer markets. The combined customer base demonstrates strong fundamentals, with monthly recurring revenue comprising approximately 90% of total revenue and a churn rate below the industry average. In addition, the combined company will enjoy significant opportunities for growth by cross-selling and up-selling these customers.

“This tuck-in acquisition, once closed, will notch another major milestone in Lingo’s previously announced SMB and Carrier roll-up strategy.  In addition, it will also provide an enhanced scale which will enable us to pursue additional value-enhancing initiatives including strategic acquisitions”, said Vincent M. Oddo, Executive Chairman of Lingo.

 

“This acquisition is extremely accretive and a very natural fit for Lingo.  It will help us achieve the next level of success using the increased scale and resources,” said Chuck Griffin, President & CEO of Lingo.

Macquarie Capital served as financial advisor to Lingo.  Jones Day and Cahill Gordon & Reindel served as legal advisors to Lingo.  


About Lingo
Lingo is a leading global cloud and managed service provider to the SMB, Carrier and Consumer markets.  Lingo provides modern, efficient, IP-based voice, data, network services, and managed services to customers around the globe.  Lingo serves 225,000 customers and maintains both a nationwide IP-based cloud communications network as well as a North American FG-D network serving many of the largest global Carrier customers.  Lingo also has a very experienced leadership team and is proud to provide exceptional 365/7/24 customer care.  For additional information, please visit .

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