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 [1].