Shares in MagicJack VocalTec Ltd. jumped almost 16% Monday amid a report by Axios that YipTV, an OTT video service provider, has proposed a deal to acquire the VoIP company for $9.50 per share.
The report notes that YipTV is looking to build a “multi-line, consumer home services business” and aim to “[d]rive YipTV services into at least 10% of MagicJack customers.” The report also pointes out that Michael Tribolet, YipTV’s co-founder and CEO, once served as chief business officer at MagicJack.
MagicJack shares closed up $1.05 (15.91%) to $7.65 each Monday.
YipTV and MagicJack have not responded to inquiries seeking comment, but Axios said the proposed deal would have a small fish buying a big one, noting that YipTV is projected to have less than $10 million in revenues, while MagicJack made nearly $100 million last year.
In Q1 2017, MagicJack had revenues of $23.2 million, and a GAAP net loss of $23.1 million, or $1.44 per share. The company also ended the period with cash and cash equivalents of $48.3 million and no debt, and had 2.08 “active” MagicJack subscribers after adding 92,000 during Q1. MagicJack previously announced that it had a “dual track” approaching that included a “strategic alternative” process with multiple unnamed bidders, and one in which it would continue to execute a strategy focused on “sustained success.”
According to Axios, YipTV has worked out a $95 million credit facility from Goldman Sachs to help finance the deal.