Fusion Telecommunications International Inc. struck a deal to buy privately held MegaPath Holding Corp. for $71.5 million.
Based in Pleasanton, Calif., MegaPath provides various cloud services.
The transaction is valued at under 5.0x pro forma adjusted EBITDA, including anticipated cost synergies realized within 12 months of closing, the company said May 10. Up to $10.0 million of the consideration is payable at Fusion's election in unregistered shares of Fusion common stock priced at $5.78 per share.
The company intends to fund the cash portion of the consideration via borrowings under its first-lien senior secured credit facility, $62.0 million of which is currently held in escrow for the acquisition. The transaction is expected to close within the next 90 days, subject to receipt of certain regulatory approvals and other customary closing conditions.
Bank Street Group served as the exclusive financial adviser to MegaPath in connection with this transaction.