Telecom M&A: BroadSoft Grabs Adaption Technologies

BroadSoft said in 10-Q and 8-K regulatory filings Monday that it paid $22 million in cash for Adaption's assets and expects Adaption to add about $500,000 to the current quarter's top line.

Michael Tessler, BroadSoft's CEO, said Adoption's cloud VoIP tools enhance BroadSoft's overall VoIP delivery and management expertise.

"Adding Adaption Technologies' solutions to our cloud platform will allow our service provider customers to speed time-to-market and accelerate time-to-revenue for their branded Unified Communications solutions," Tessler said in a statement.

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Adaption, founded in 2006 and based in Spring, Texas, first launched Rialto in 2009 as a way to streamline how service providers deploy and manage VoIP services to customers. Its various applications include Rialto Market, which automates sales and order management, Rialto Fossa, which automates device configuration, and Rialto Siena, for secure payment data storage and transaction processing.

It'll play a key role in BroadSoft's BroadCloud, which was introduced in October 2010 as the company's platform for delivering SaaS communications.

BroadSoft announced the Adaption acquisition along with better-than-expected second quarter earnings, which goosed its stock 21 percent after hours on Monday. For Q2, it reported $40.5 million in revenue, up 26 percent from the previous-year quarter and better than both BroadSoft's previous projection of $36 million to $38 million and an analyst consensus of $37.3 million. Quarterly profit was $2.4 million.

BroadSoft's full year revenue for 2011 was $138.1 million.

BroadSoft has made several acquisitions in the past two years, including Movial Applications in October 2011, iLinc Communications in September 2011, and Casabi in October 2010. The hosted communications space has seen frequent M&A activity as of late, with ShoreTel acquiring M5 Networks in the spring and Masergy buying Broadcore last month.