The CPaaS market continues to be a hotbed of M&A activity with Ooma’s acquisition of CPaaSAA Member 2600hz.
Ooma, Inc., a smart communications platform for businesses and consumers, today announced that it has acquired 2600Hz, Inc., a leader in modern and flexible business communications applications targeted at resellers and carriers, for approximately $33 million in cash, subject to customary purchase price adjustments. 2600Hz is expected to add approximately $7 million in annual recurring revenue to Ooma.
The transaction was completed on October 20, 2023. The purchase price was partially funded by a new $30 million revolving line of credit facility with Citizens Bank, N.A. Additionally, following the closing, certain former 2600Hz employees who join Ooma will be granted equity awards under Ooma’s 2015 Equity Incentive Plan, subject to vesting conditions.
2600Hz (https://www.2600hz.com) has a global customer base leveraging Kazoo (https://2600hz.org), its open-source communications solution, and a suite of proprietary applications through open APIs to provide Unified Communications as a Service (UCaaS), Communications Platform as a Service (CPaaS), Call Center as a Service (CCaaS) and AI tools and applications. With the transaction, Ooma takes over the direction and development of 2600Hz’s technology road map and will complement the 2600Hz offerings with Ooma’s proprietary intellectual property to create more powerful, scalable and open communications solutions for the industry.
As a proponent and user of 2600Hz open-source applications for more than ten years, Ooma has extensively integrated its intellectual property with 2600Hz. The acquisition advances Ooma’s integrated business service through the addition of Call Center, CPaaS and AI capabilities. It will also expand Ooma’s customer base to include service providers and resellers utilizing 2600Hz for their bespoke offerings. For 2600Hz, the acquisition will strengthen its solution by leveraging Ooma’s low-cost telecom infrastructure and scale, as well as its mobile, web, desktop and other applications.
“We’re delighted to welcome 2600Hz into the Ooma portfolio of business solutions,” said Eric Stang, chief executive officer of Ooma. “This acquisition is complementary to our strategy to extend our leadership in serving business customers, both directly and now through other service providers, and it is expected to accelerate overall growth of Ooma and the reach of our solutions. We are excited to bring Ooma’s unique engineering expertise to better serve 2600Hz’s customers worldwide.”
Orrick, Herrington & Sutcliffe LLP acted as legal advisor to Ooma, and Beyers Costin Simon PC acted as legal advisor to 2600Hz.