Synacor, a cloud software provider, is merging with Qumu, which specializes in enterprise video applications, in an all-stock deal.
The merger will combine Qumu’s Enterprise Video platform with Synacor’s Cloud ID Identity and Access Management platform, and the Zimbra Email and Collaboration platform. The companies also said the deal will improve Qumu’s go-to-market strategy through Synacor’s more than 1,900 channel partners and through cross selling opportunities.
“This is a strategic and highly synergistic combination that creates operating software scale and accelerates growth,” said Himesh Bhise, CEO of Synacor, in a statement. “Together with Qumu, we will be a software-focused business with about $50 million of high-margin recurring revenue, positioned in the attractive Collaboration product segments of Email, Identity, and Video, with an enviable customer base that spans Enterprise, small and medium business, Government, Service Providers, Content Providers, and Publishers. Our portal and advertising business will continue to meaningfully contribute to Synacor’s top and bottom line, as we benefit from the expanded scale and scope of our software and services segment. This is an exciting day for the employees, customers, and shareholders of Qumu and Synacor.”
Bhise will continue as chief executive officer and Tim Heasley as chief financial officer of Synacor. Vern Hanzlik, CEO of Qumu, will join Synacor as chief revenue officer for software and services.
“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,” said Hanzlik in a statement. “As the demand for enterprise collaboration solutions continues to expand, we believe there will be a significant opportunity for us to position a combined email, video and identity offering to reach a much wider cross-section of the enterprise market with a scalable, highly secure and extensible solution for cloud-based and hybrid deployments.”
The combined company is expected to have over $120 million in annual revenue on a pro forma basis. This will include an estimated $70 million in software revenue.
After closing, Synacor common stock, including the shares issued in the merger, will trade on the Nasdaq under the ticker “SYNC.” Synacor stockholders are expected to own approximately 64.4% and Qumu shareholders are expected to own approximately 35.6% of the stock of the combined company.