Ribbon Communications has entered into an agreement to acquire, through a merger, ECI Telecom Group Ltd (“ECI”), a global provider of end-to-end packet-optical transport and SDN/NFV solutions for service providers, enterprises, and data center operators, for 32.5 million shares of Ribbon common stock and $324 million of cash. ECI stockholders will also receive approximately $31 million from ECI’s sale of real estate assets.
With this transformational transaction, Ribbon and ECI will create a powerful, leading edge solutions provider with anticipated combined annual revenue of over $900 million1, serving customers in more than 140 countries1, and 4,000 employees worldwide1. Ribbon expects the combination to position the company for growth and to enhance its competitive strengths by expanding its product portfolio beyond solutions primarily supporting voice applications to include data applications and optical networking.
The combined company expects to realize revenue synergies from the expansion of Ribbon’s addressable markets and sales of ECI’s products in Ribbon’s markets, with an emphasis on North America and Japan. Furthermore, the combined company will be well positioned to serve the high-growth 5G market. The services associated with 5G are expected to drive a substantial increase in network demand and will likely require additional investment in the networking layer, where ECI is already a leading vendor.
