What is Cloud Computing?
Cloud Computing enables the transition of IT resources (such as servers, storage and applications) from on-premise to on-demand in the cloud. Cloud services represent the next major wave of IT innovation and is transforming managed IT services for small and medium businesses (SMB).
Why did Cbeyond purchase MaximumASP and Aretta Communications?
The acquisition of MaximumASP and Aretta provides Cbeyond with a talented team and a best of breed, award winning and scalable cloud services platform. In addition, cloud services expand Cbeyond’s addressable market (no geographic boundaries and new channel opportunities) and are expected to be a significant opportunity for Cbeyond.
What are the transaction details?
The combined transaction value is approximately $40 million, payable in cash, of which approximately $33 million was paid at closing and the balance, up to 17.5 percent of the combined purchase price, will be paid in early 2012, subject to the achievement of 2011 revenue and technical development targets.
When is the deal final?
Cbeyond acquired the assets of MaximumASP on November 3 and the stock of Aretta Communications on October 29, 2010.
How much revenue will Aretta Communications and MaximumASP bring to Cbeyond?
The combined fiscal year 2010 revenue of the acquired companies is estimated to be approximately $12 million.
What services do Aretta Communications and MaximumASP provide?
Maximum ASP provides cloud services such as managed virtual servers and physical servers and Aretta Communications provides cloud services such as cloud PBXs (private branch exchange) and SIP (session initiation protocol) trunking. SIP trunking service allows customers with premise-based PBXs or cloud PBXs to originate and terminate voice calls.
Both companies target SMBs throughout the U.S.
Will the two companies be branded under Cbeyond?
Cbeyond plans to combine MaximumASP and Aretta Communications to form a new, high growth cloud services Cbeyond division.
Who will lead the Cbeyond cloud services division?
Brooks Robinson of Cbeyond will lead the new cloud services division.
How and when will Cbeyond begin selling Aretta and MaximumASP solutions?
At the beginning of the fourth quarter of this year, Cbeyond began a market trial for cloud services. Cbeyond’s upselling team targeted a select group of existing Cbeyond customers to upsell virtual and physical servers. The initial response and key learnings were an early success that Cbeyond will build on in the coming months as the Company begins offering cloud servers and cloud PBXs through Cbeyond’s direct sales force and indirect channel partners. By the end of the first quarter of 2011, Cbeyond expects to be selling cloud services through all sales channels. In addition, over the coming months Cbeyond expects to expand the on-line distribution channels of MaximumASP and Aretta under the Cbeyond brand.
About Cbeyond
Cbeyond, Inc. (NASDAQ: CBEY) is a leading provider of IT and communications services to more than 55,000 small businesses throughout the United States. Recently named as the sixth fastest growing technology company by Forbes magazine, and added to Standard & Poor's Small Cap S&P 600 Index, Cbeyond offers more than 30 productivity-enhancing applications including local and long-distance voice, broadband Internet, mobile, BlackBerry(R), broadband laptop access, voicemail, email, web hosting, fax-to-email, data backup, file-sharing and virtual private networking. Cbeyond delivers these services over a 100 percent private all IP network. For more information on Cbeyond, visit www.cbeyond.net and follow Cbeyond on Twitter: www.Twitter.com/Cbeyondinc.
Forward-Looking Statements
This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to statements identified by words such as “expectations,” “guidance,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “targets,” “projects” and similar expressions. Such statements are based upon the current beliefs and expectations of Cbeyond’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. Factors that might cause future results to differ include, but are not limited to, the following: the risk that the anticipated benefits, growth prospects and synergies expected from our acquisitions may not be fully realized or may take longer to realize than expected; the possibility that economic benefits of future opportunities in an emerging industry may never materialize, including unexpected variations in market growth and demand for the acquired products and technologies; delays, disruptions, costs and challenges associated with integrating acquired companies into our existing business, including changing relationships with customers, employees or suppliers; unfamiliarity with the economic characteristics of new geographic markets; the amount of costs incurred in connection with the entrance into new markets; ongoing personnel and logistical challenges of managing a larger organization; our ability to retain and motivate key employees from the acquired companies; and general economic and business conditions. You are advised to consult any further disclosures we make on related subjects in the reports we file with the SEC, including the “Risk Factors” in our most recent annual report on Form 10-K, together with updates that may occur in our quarterly reports on Form 10-Q and Current Reports on Form 8-K. Such disclosure covers certain risks, uncertainties and possibly inaccurate assumptions that could cause our actual results to differ materially from expected and historical results. We undertake no obligation to correct or update any forward-looking statements, whether as a result of new information, future events or otherwise.