Ribbon Communications Inc. · NASDAQ:RBBN
Ribbon Communications — Sonus Networks — Merger or Acquisition (June 2017)
20 slides from Ribbon Communications's merger presentation, Jun 19, 2017
Slide 1: Forward Looking Statements
Forward Looking Statements IMPORTANT INFORMATION ABOUT THE TRANSACTION WILL BE FILED WITH THE SEC In connection with the proposed transaction, Sonus will cause Solstice Sapphire Investments, Inc., a wholly-owned subsidiary of Sonus formed to act as a holding company in connection with the transactio
Slide 2: Compelling strategic & financial rationale
Products and Reach Highly complementary product portfolios and expanded geographic reach Scale and Customers Enhanced scale with deeper global sales footprint and more diversified customer base Financial Profile Significantly higher revenues, gross profit, earnings and cash flow from operations Syne
Slide 3: Transaction Overview
Structure/Ownership Sonus and GENBAND shareholders will each own approximately 50% of the combined company GENBAND’s equity holders will receive ~50 million shares of common stock of the combined company and a $22.5 million unsecured note Enterprise Value ~$745 million – based on Sonus’ closing stoc
Slide 4: Company snapshot
Company snapshot 695+ Customers Globally ~1,400 Employees and Contractors in 22 countries / territories Network Transformation and Evolution Cloud CUSTOMER OFFERINGS Security Mobility Communications-Platform-as-a-Service (CPaaS) 850+ Customers Globally ~2,000 Employees and Contractors in 24 countrie
Slide 5: Sonus + GENBAND 2016 Combined Company Snapshot
SONUS + GENBAND 6 2016 Combined Company Snapshot (in mm) SONUS GENBAND COMBINED (without Synergies) GAAP Revenue $252.6 $427.1 $679.7 Gross profit $167.6 $214.2 $381.8 Gross margin 66.4% 50.2% 56.2% Operating income (loss) $(13.6) $(17.9) $(31.5) Operating income margin -5.4% -4.2% -4.6% Non-GAAP Re
Slide 6: Financially compelling transaction
Financially compelling transaction 7 $680 $680 Highly Accretive Expected to be substantially accretive to Sonus’ non-GAAP EPS in 2018 Positive Cash Flow From Operations Expected to drive solid cash flow from operations from the first year Attractive Combined Financials Combined 2016 revenue of ~$680
Slide 7: Complementary strengths
“In an increasingly complex, real-time world where the pace of innovation (its risks as well as rewards) is accelerating, enterprises are shortening their preferred vendor lists. Hence, what might be called a ‘scale of trustworthiness’ is emerging.” Peter Bernstein, “GENBAND and Sonus Merger—IP to t
Slide 8: Cost synergies
Cost synergies 9 Following full impact of expected annualized synergies, combined company expected to generate at least $100 million of annual EBITDA; Fiscal year 2020 EBITDA is projected to be approximately $140 million $40-50m R&D S&M G&A COGS S&M G&A COGS R&D
Slide 9: Strong growth initiatives
Strong growth initiatives 10 An innovative Cloud Communications Platform enabling rapid new service deployment and revenue for carriers, ISV's and enterprises Solutions powered from the Kandy platform include: Unified communications, embedded communications and OTT solutions Cloud Security Offer Sec
Slide 10: About GENBAND
Extensive Customer Base in 90 Countries 2,200 Central Offices Transformed 42M Lines Migrated to IP 298M IP Sessions Shipped 18M UC Ports Shipped ABOUT genband Service Providers Channels & ISV’s Enterprise Customers 11 Deep Experience in Network Transformation Projects CPaaS Unified Communications Em
Slide 11: GENBAND Historical Revenue
Genband HISTORICAL Revenue 2015 impacted by reduction in North America carrier capex spend 2015 & 2016 international revenue decreased as compared to 2014, primarily due to weakening of certain foreign currencies 2016 VoIP product and software grew 15% versus 2015 Services (which includes maintenanc
Slide 12: GENBAND Financial Profile
Significant Investments in R&D and Intellectual Property Kandy CPaaS product development Comprehensive IP portfolio Improved Operating Performance Continuous cost containment efforts Reduced headcount costs Leveraged existing infrastructure Improved Gross Margin Continued software content expansion
Slide 13: GENBAND Core Business: PSTN Transformation
GENBAND CORE BUSINESS: PSTN Transformation For the next 7 years 14 PSTN: Public Switched Telephone Network OSS/BSS: Operational Support Systems/Business Support Systems VoIP: Voice Over IP See Appendix for sources North America Market $1B 62M non-VolPLines 28K Central Offices Global Market $5.4B 514
Slide 14: GENBAND Key Historical Growth Investments
GENBAND KEY HISTORICAL GROWTH INVESTMENTS 15 Wireless Transcoding Transcoding for growing Voice Over LTE (VoLTE) market Only 5% of global mobile subscribers on VoLTE today Emerging 4G Enhanced Voice Services (EVS) market EVS frees up valuable spectrum for data reuse CPaaS – Kandy Purchased UReach (2
Slide 15: Kandy: Ranked a strong and emerging cloud communications player
Kandy: Ranked a strong and emerging Cloud communications Player Source: IDC 2016 MarketScape: Worldwide Cloud Communications Platforms 2016 Vendor Assessment, Courtney Munroe, June 2016, IDC # US41275216 16 451 Research, Raúl Castañón-Martínez, Mark Fontecchio (May 6, 2016): “ CPaaS is one of the ho
Slide 16: Combination Benefits All Stakeholders
CUSTOMERS Larger company with greater resources to support our customers, and significant ongoing investments in R&D to innovate ahead of the market INVESTORS Market leader with an actionable growth strategy aligned with core business and IP EMPLOYEES Execution on our combined growth initiatives pro
Slide 17: Combination Benefits All Stakeholders
COMBINATION BENEFITS ALL STAKEHOLDERS “y ie Complementary Strengths Expanded Reach and Complementary Growth and Strategies Geographic Footprint Initiatives ~ Contin company wb rig ~ Gib ses oot 0827 cues ~ GENBANOS Kandy CPaaS Eats hctedaleaned ———— Seem caer Sa poets rier eRaltecot creas conan sens
Slide 18: Appendix
Appendix 19 Global: 514M non-VoIP – IHS Markit Service Provider Capex, Opex, Revenue, and Subscribers Database, March 3rd, 2017 $260B Global Fixed Service Provider Revenues – Ovum TELECOMS, MEDIA & ENTERTAINMENT OUTLOOK 2015, Global Fixed Voice and Broadband Outlook: 2014–19 North America 62M non-Vo
Slide 19: Appendix: Source References for PSTN Transformation Slide
APPENDIX SOURCE REFERENCES FOR PSTN TRANSFORMATION SLIDE Global: 514M non-VolP — IHS Markit Service Provider Capex, Opex, Revenve, and Subscribers Database, ‘March 3, 2017 North America 62M non-VolP ~ FCC Vice Telephone Services: Status as of June 30, 2016 and corroborated by IMS Mart Service Provid
Slide 20: © Sonus GENBAND
© Sonus GENBAND