Industry leaders Synacor and Qumu have agreed to merge in an all-stock transaction, creating a formidable global leader in SaaS-based collaboration software.
Synacor is a cloud-based company that provides collaboration and communication solutions to governments, enterprises, global video users and internet and communications provides among others. Qumu has a complementary offering in that it provides critical tools for deploying live and on-demand video for the enterprise.
When the merger is completed, each share of Qumu common stock will be equivalent to 1.61 common stock shares of Synacor. At closing, the common stock of Synacor — including the shares issued in the merger — will be trading as “SYNC” on the NASDAQ.
Each Synacor stockholder will own about 64.4% of the stock of the combined company, whereas each Qumu shareholder will own approximately 35.6%.
The merger is intended to increase operating efficiencies, enhance commercial scale, accelerate revenue growth, and open new sales channels.
The combined company is expected to create over $120 million in annual revenue. This includes $70 million in software revenue — with about 70% of that ($50 million) representing recurring revenue — and $50 million from Synacor’s portal and advertising business.
Himesh Bhise will continue as Syncor’s CEO While Qumu CEO Vern Hanzlik will join Synacor as Chief Revenue Officer for Software & Services. Tim Heasley will continue as Synacor’s CFO.
Seven directors will make up the newly combined company’s Board of Directors. Synacor will appoint three while Qumu will appoint two. Synacor CEO Himesh Bhise will be the sixth director. The seventh independent director — who will likely serve also as Chairperson — will be chosen by the new Board.
The Boards have already approved this merger plan. This transaction is expected to close by mid-2020 after all the approvals, closing conditions, and other legalities are ironed out.
“Together with Qumu, we will be a software-focused business with about $50 million of high-margin recurring revenue… This is an exciting day for the employees, customers, and shareholders of Qumu and Synacor,” said Bhise.
Vern Hanzlik, President and CEO of Qumu, agrees, “With Synacor having an extensive network of more than 1,900 distribution partners and an established base of more than 4,000 customers, the merger will immediately accelerate our go-to-market efforts.”
Ballard Spahr LLP is serving as legal advisor and Stifel Financial as financial advisor to Qumu. Gunderson Dettmer is serving as legal advisor and Canaccord Genuity as financial advisor to Synacor.
