Enterprise video platform leader Qumu announced today that it is merging with software and services company Synacor in an all-stock deal that will result in a combined company that operates under the Synacor name.
The merger brings together Qumu’s enterprise video solutions with Synacor’s Cloud ID Identity Management platform and Zimbra Email & Collaboration platform, emphasizing how video has become just as crucial to corporate communications strategies as email is. The combined company is projected to be bring in annual revenue of $120 million, with $70 million in software revenue ($50 million of which would be recurring) and $50 million from Synacor’s portal and advertising business.
According to a press release, the merger speeds up Qumu’s go-to-market strategy by bringing access to more than 1,900 Synacor Channel Partners. Synacor has a total base of more than 4,000 enterprise, government, service provider, content provider, and publisher customers. Qumu’s existing customers include Visa, AT&T, CVS, BT, Barclays, and Deloitte. Synacor customers include HBO, Dish, CenturyLink, YouTubeTV, Cheddar, T-Mobile, and Shaw.
“As the demand for enterprise collaboration solutions continues to expand, we believe there will be a significant opportunity for us to position a combined email, video and identity offering to reach a much wider cross-section of the enterprise market with a scalable, highly secure and extensible solution for cloud-based and hybrid deployments,” said Vern Hanzlik, president and CEO of Qumu, in a press release.
Qumu announced a number of developments in the past 18 months, starting back in December 2018 when it agreed to a distribution partnership with BT to enable it to be offered to new potential clients. This could continue to be an important growth driver. In June 2019, Qumu announced a partnership with CaptionHub to try and tackle the knotty issue of AI-based captioning.
In September 2019 it also announced a major update to its on-prem offering as it continued to offer robust solutions for cloud and on-prem users. However perhaps the most significant development was Qumu opening its ecosystem to third-party partners to offer a range of peer to peer and other functionality. This could be an important step in broadening the functionality of the platform and expanding its usefulness in new sectors.
In the merger, each share of Qumu common stock issued and outstanding will be converted to approximately 1.61 shares of Synacor common stock. When the deal closes, Synacor stockholders are expected to own approximately 64.4% of the combined company, with Qumu stockholders owning the rest.
Synacor CEO Himesh Bhise will continue as chief executive, while Hanzlik will become chief revenue officer of software and services of the combined company.
Jake Ward contributed to this story.