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Fusion Acquires Cloud Services Provider Fidelity

NEW YORK, NY--(Marketwired - December 09, 2015) - Fusion (FSNN), a leading provider of cloud services, announced today that it has acquired Fidelity Voice and Data ("Fidelity"). Beachwood, Ohio-based Fidelity provides cloud voice, cloud connectivity, security, data center and cloud storage services to approximately 2,000 small, medium, and large business customers in the Midwest and throughout the U.S. Fusion expects to complete the integration of Fidelity by the end of the second quarter of 2016.

Total consideration in the transaction, which closed on December 8, 2015, was $30.0 million consisting of $28.5 million in cash and $1.5 million in Fusion common stock. The cash portion of the consideration was funded via Fusion's existing bank credit facility and its cash balances. The transaction is immediately accretive to Fusion, with substantial opportunity for cost savings through elimination of redundancies.

Fidelity Acquisition Highlights

  • Contributes a revenue base of approximately $18 million per year, over 90% of which consists of monthly recurring revenues (MRR), growing nearly 10% organically through the first nine months of 2015
  • Adds approximately $6 million in annual pro forma Adjusted EBITDA after giving effect to projected cost synergies
  • Brings a customer base of approximately 2,000 businesses with a high average monthly revenue per customer (ARPU) of approximately $750 with a low churn rate of approximately 0.5% per month
  • Purchase price represents a valuation of 5.0x pro forma Adjusted EBITDA
  • Offers a highly comparable set of cloud solutions and network infrastructure which can be tightly integrated into Fusion's existing platform
  • Contributes a strong team of experienced cloud technology professionals

Also, on December 7, 2015, Fusion completed an offering of common shares totaling approximately $6.0 million via its shelf registration statement, priced at the market close on December 4, 2015. The offering included significant additional commitments from Fusion's...