Telecom M&A: Masergy Snaps Up Broadcore

Financial terms of the deal were not provided. Broadcore brings Masergy a full complement of cloud-based UC, SIP trunking, mobility and custom integration services. It becomes a wholly owned subsidiary of Masergy, now known as Broadcore, a Masergy company, and Broadcore's service platform will be embedded into Masergy's global MPLS network.

Chris MacFarland, Masergy's CEO, praised Broadcore for "transforming a traditional PBX service business into a next-generation cloud communications provider."

"The cloud communications market opportunity is expanding rapidly, and with this transaction, we can immediately offer these cloud solutions to enterprises on a global basis," MacFarland said in a statement.

[Related: Ring Leaders: The Convergence of VARs, Carriers and the Telco Channel ]

Los Angeles-based Broadcore was established in 2004, initially as an outgrowth of a telecom equipment VAR called Nextcom. Its hosted services are provided off a BroadSoft BroadWorks platform.

CEO and President Monty Ferdowsi, a decades-long veteran of the VoIP space, is now Masergy's senior vice president, cloud communications, while Broadcore co-founder, executive vice president and COO Dean Manzoori becomes vice president, cloud communications.

Masergy, based in Plano, Texas, was acquired last summer by private equity firm ABRY Partners, only a few months after scrapping plans for a $100 million IPO. It partners with VARs, systems integrators and telecom agents as well as consultants and network and video equipment manufacturers, not to mention Cisco, with which it is a Managed Services partner for TelePresence.

Cloud-based communications services are expected to keep growing -- Infonetics Research pegged the year-over-year growth of hosted PBX and UC services at 33 percent last year and SIP trunking at 128 percent. The number of customer seats for hosted business VoIP and UC is expected to more than double by 2016, according to Infonetics.

That growth has put the hosted UC space in the spotlight for both consolidation and venture capital, as well as considerable investment by major network and software vendors such as Cisco, Google, Microsoft and Siemens Enterprise Communications.

Among key moves in the past year, ShoreTel acquired M5 Networks and RingCentral copped a $10 million Series D round of funding.

There have been executive changes aplenty, too, among them Rob Shelby, who exited the channel chief role at Masergy in June to take over as vice president of channel sales at Thinking Phone Networks.

PUBLISHED JULY 11, 2012