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RUMOR MILL: BroadSoft buys Sylantro
If our sources are correct (and we're not being elaborately punked), BroadSoft has tendered an offer to Sylantro for acquisition, and Sylantro's board of directors approved the deal earlier this week. Terms of the deal apparently are not favorable to most/many Sylantro stock holders, but some will walk away with some cash.
A BroadSoft representative declined to comment on the matter, saying it is the company's policy not to comment on rumors. Calls and emails to Sylantro for comment were not returned by press time.
Sylantro is said to have circulated documents to its private shareholders describing the deal and asking for their consent to the merger, requesting a response by December 12, 2008. Stockholders and option holders outside of the Series E-1 Preferred class are being asked to "consent" to the retirement of shares or options in exchange for nothing.
As a part of the acquisition, BroadSoft is supposedly agreeing to take on 11 Sylantro employees and a bunch of people will get cash compensation of some sort; most likely for termination of employment contracts.
Another source described the deal as an "asset sale" with Sylantro having to do the deal because it ran out of cash and wants to avoid bankruptcy.
Rumors of BroadSoft and Sylantro getting together first started circulating this fall, with more-than-the-usual buzz coming out of BroadSoft's annual users conference. Sources close to BroadSoft and analysts in attendance at the conference said they had heard a deal between the two parties was under discussion.
Vendors dealing with Sylantro said the company had curtailed spending and quietly implemented some staffing cuts over the past few months, with belt tightening occurring after the company's Global Summit 2008 user group event in mid-October. Sylantro's PR firm was put on hiatus after Global Summit.
A source close to BroadSoft said the company had raised another round of venture capital in September or October - a move upsetting to some employees since BroadSoft CEO Michael Tessler had foresworn the need for more money after taking its last round of investment. If true, we now know what the money was used for.
If the deal has gone down, it brings together VoIP application server market-leader BroadSoft and its largest rival in the space.
Pete Wylie contributed to this report
For more:
- A former Sylantro employee said a deal was done on Tuesday, Dec. 16. Blog.
Related articles
FierceVoIP Leaders- Michael Tessler, CEO Broadsoft - FierceVoIP
FierceVoIP Leaders: Marco Limena, CEO Sylantro Systems - FierceVoIP
Sylantro: UC the Pull for IMS - FierceVoIP
BroadSoft cuts jobs -- but how many? - FierceVoIP
Comments
Posted by Anonymous | December 18, 2008 - 1:30pm
It is not a rumor, it is true. Broadsoft is buying Sylantro - but they are terming it a "merger" in the legal transfer documents. The execs are getting a pay off, everyone else that bought stock, and all other employees, got nothing.
Posted by Doug Mohney | December 18, 2008 - 1:49pm
We would like to call this "true," but for the following reasons--
1) We have not had official confirmation from either BroadSoft or Sylantro. BroadSoft is not commenting on rumors and Sylantro is not returning our calls.
2) We have not seen a copy of the legal transfer documents or anything sent to existing Sylantro shareholders. If there are no NDA or other non-disclosure provisions attached to the documents, we would love to see them. The fax number to use is 440-306-1700.
3)We have had verbal conversations and email exchanges with parties who have insights into both camps. We do not have anyone who is willing to go "on the record" with a first person statement.
Posted by Anonymous | December 29, 2008 - 6:39pm
Broadsoft gobbles up Sylantro CUSTOMER BASE
This was just waiting to happen. When you mix greed corruption politics with VOIP you end up with Sylantro IDC at Bangalore. The organisation was too small to cope with corruption. Quality deteriorated with every release, from 4.1.1 to 4.2 to 4.3. Disgruntled senior developers left abruptly during BT specific release 4.3. BT dumped, sylantro slumped.
What should have been a day to plan IPO, endedup as a funeral ceremony. Classic example for future startups to learn the significance of quality in this domain.
RIP Sylantro.
Posted by Anonymous | January 5, 2009 - 2:39pm
Sylantro was a great company, with some excellent people that I had the pleasure to do business with over the years They had a great product through Release 4.1. I had no direct experience with the product after development was moved to Bangalore.
Broadsoft has also been a strong company with a strong product, perhaps better positioned than Sylantro for SIP trunking, and they will now be stronger in the hosted VoIP industry after their purchase of Sylantro.
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