iBasis Pays $100 Million For Speech ASP
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The move bolsters iBasis' service offerings to large business customers as well as its bottom line. With gains from PriceInteractive, iBasis expects to be profitable in the second quarter of 2002, six months ahead of schedule.
Under terms of the deal, expected to close in the first quarter, iBasis will exchange 10.1 million shares of its stock and about $50 million in cash for the privately held company.
"The combination of our two companies will allow us to more quickly realize our vision of delivering enhanced services for enterprises and service providers over our global (voice over Internet protocol) network," said Ofer Gneezy, iBasis' president and CEO.
It will also help iBasis move toward profitability. The company, founded in 1996, has spent significant capital to build its Internet switching centers throughout the world.
In 1999, PriceInteractive had revenue of $11.8 million and net income of $707,000. It projects revenue up to $18 million in 2000 and $30 million in 2001, with gross margins of up to 50 percent.
PriceInteractive's 140 employees will stay in Reston. The company's customers include AT&T, ExxonMobil, Gannett, Morgan Stanley, Sprint and Verizon.
"iBasis has the vision, the leadership and the means to significantly expand the global reach and greatly enhance the overall value of PriceInteractive's solutions," said Dan Price, PriceInterActive's president and CEO.
The PriceInteractive purchase in iBasis' second speech-software deal in as many weeks. Last week it signed a technology partnership with SpeechWorks of Boston.
Investors liked today's deal and the improved financial guidance, pushing IBAS up .719, or 11 percent, to 7.406 in morning trading. In the last 52 weeks, the stock has been as high as 94.25 and as low as 4.25.