Technology

Synacor Snares Zimbra

Comcast a Customer of Email and Messaging Software Company 8/18/2015 6:00 PM Eastern Last updated at 8/18/2015 6:02 PM

Synacor said it will put up $24.5 million to acquire “certain assets” of Zimbra, a major provider of open source-based email, messaging and collaboration software that counts customers such as Comcast, Vodafone, Emerson, Red Hat and H&R Block.

 

Synacor, which expects the deal to close within 45 days, said the deal is comprised of $17.3 million in cash and the issuing of 3 million shares, 600,000 warrants (priced at $4 per share), and paying up to $2 million in earn-outs over the next 18 months.

 

About 140 employees will join Synacor, expanding that total to about 400, an official said.

 

The deal comes soon after Synacor announced that MTS, a top telecom provider in Manitoba, tapped Synacor’s Cloud Email Platform to support the MTS Mail email service. It also comes about eight months after Synacor shored up its OTT focus via the acquisition of NimbleTV.

 

Synacor, which also specializes in TV Everywhere authentication systems and develops customized Web portal and metadata services also works with customers such as Mediacom Communications, BendBroadband (now part of TDS Telecom), Buckeye CableSystem, Google Fiber, CenturyLink, Cable One, Charter Communications , Suddenlink Communications, WideOpenWest, Surewest Communications, Verizon Communications, and Sling TV.

 

“Email has been and continues to be important to our internet service provider customers, and has been a double-digit growth business for Synacor this year, driving portal traffic and monetization,” said Synacor CEO Himesh Bhise, in a statement. “We now have an even more compelling value proposition offering Zimbra’s on-premise technology as well as Synacor’s managed service solutions and advertising products.”

 

Synacor said the acquisition will make it the largest provider of ISP email solutions in the U.S., noting that Zimbra serves more than 120 ISP and CSP customers around the world. Zimbra also works with more than 1,000 value-added resellers and 500-plus hosting providers.

 

The acquisition will also accelerate Synacor’s plans to expand its portal, video and advertising products outside the U.S., the company said.

 

In the wake of the deal, Synacor raised its full-year financial guidance to reflect Zimbra contributions, expecting full year 2015 revenue of $102 million to $108 million, up from $97 million to $102 million. Expected adjusted EBITDA rises to $4 million to $6 million, from $3.5 million to $5 million. 

Want to read more stories like this?
Get our Free Newsletter Here!