Sweden's Sinch to buy communications firm Inteliquent for $1.14 billion
STOCKHOLM (Reuters) – Swedish cloud computing services provider Sinch AB said on Wednesday it had agreed to buy communications company Inteliquent for $1.14 billion in cash to expand its presence in the United States.
Shares of the company, which have more than tripled over the last 12 months on the back of the work-from-home trend prompted by the pandemic, jumped another 16% in morning trade.
A rival of U.S.-based Twilio Inc, the company said the acquisition would expand its role in voice connectivity for enterprises and telecom carriers in the United States.
Many text messages users get from companies, ranging from banks to food deliverers, use Sinch’s platform.
“The acquisition is interesting as it offers growth opportunities ahead, further improves customer stickiness and is highly accretive from start,” analysts at Carnegie said.
“Compared to our 2021 estimates, Inteliquent will add 33% to group revenues and 59% to gross profit.”
Founded in 2008 as CLX Communications, the company bought Sinch in 2016 and last year rebranded the entire company to take that name. It counts Softbank-owned SB Management among its investors.
Inteliquent, owned by private equity firm GTCR, has a broad U.S. presence, reaching over 94.5% of the country’s population and handling 300 billion minutes of traffic on its network annually.
“Our joint strengths in voice and messaging provide a unique position to grow our business and power a superior customer experience for our customers,” Chief Executive Oscar Werner said in a statement.
Sinch said it expected the transaction to close in the second half of the year.
To fund the deal, it will get financing of 8.2 billion crowns from Handelsbanken and Danske Bank, in addition to its existing facilities with the same banks.
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