BroadSoft acquiring Sylantro - The impact

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In a major consolidation of the VoIP application server space, BroadSoft Inc. is expected to publicly announce its acquisition of Sylantro Systems before Christmas -- if not sooner.  Multiple sources with insight into BroadSoft and Sylantro say it's a done deal, with former Sylantro employees conducting a privately-held wake on a LinkedIn discussion.

At BroadSoft, the acquisition is being viewed as a major boon with great respect being given to Sylantro's past accomplishments in the marketplace, as well as its current brand strength.  The company will gain 50 new customers from Sylantro, including AT&T, Qwest, Swisscom and NuVox. BroadSoft executives describe Sylantro as a "formidable competitor" for the past decade and say they are "fortunate" to be able to acquire such a strong brand.

Terms of the deal appear to have been quite favorable. Sources say BroadSoft believes it will be able to generate positive cash flow from the acquisition in 2009, a feat it attributes to the consideration and terms of the merger. 

Others "in the know" on the transaction say that Sylantro was running out of cash with no means to raise additional capital.  A shotgun wedding with BroadSoft was a way to save jobs for some employees and spare existing customers the uncertainty of a bankruptcy filing.

Sylantro's R&D office in Bangalore, India, is listed as a "key asset" in the acquisition. In addition, BroadSoft expects to keep a (smaller) office in Sylantro's Silicon Valley HQ and keep parts of the sales organization.

Doug Mohney contributed to this report.

For more:
- We don't think it's a rumor anymore, but we do not have official confirmation from either company. RUMOR MILL: BroadSoft buys Sylantro

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