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Fusion Telecom Acquires Birch Cloud Service Provider Business: Report

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Fusion Telecommunications International is acquiring the cloud and business services unit of Birch Communications, according to Reuters. The combined company will have a $950 million valuation, 30 data centers, 31,000 miles of fiber networks and 150,000 business customers, the report said.

Fusion has been in growth mode, especially on the business front. Fusion earlier this month said revenues were $38.1 million in Q2 2017, up 23 percent from $31 million in Q2 2016. Most of the growth involved business services -- where revenue jumped 40 percent to $30 million, Fusion said at the time. Still, the company had a net loss of $3.1 million for the period.

Fusion positions itself as a cloud services provider for small, midsize and large businesses. The company's core services include cloud communications, contact center, cloud connectivity, and cloud computing.

About Birch Communications

Meanwhile, Birch positions itself as a managed voice and cloud solutions provider that offers phone solutions, hosted data centers, hosted file storage services, and network access solutions like Metro-fiber, Ethernet and copper. The company expanded its channel program in 2016, promoting Paul Masters to senior VP of alternate channels at the time. Shortly thereafter, Birch launched a hosted unified communications platform that SMB customers can access from desktops, tablets and smartphones.

Both Fusion and Birch have M&A experience in the cloud and managed services market. Fusion acquired Apptix in 2016 year for $28 million. For its part, Birch has acquired more than 20 companies -- including buying CBeyond for $323 million in 2014. At the time of that deal, Birch had five data centers and 570 colocations.

Still, it sounds like Birch may have contracted a bit since the CBeyond deal. At the time of that 2014 transaction, Birch said the resulting company would have 200,000 business customers located in all 50 states, the District of Columbia, Canada and Puerto Rico. That's 50,000 fewer business customers than the combined Fusion-Birch deal will have. We're checking the figures.

Official Announcement

Fusion and Birch are expected to announce their business combination later today, Reuters said. Fusion CEO Matthew Rosen will run the combined company, the report added.

ChannelE2E has reached out to Fusion and Birch for comment. We'll update our coverage if/when the company's confirm the deal or reply to our request for comment.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.