SAN JOSE, Calif.--(BUSINESS WIRE)--8x8, Inc. (NYSE: EGHT), a leading cloud provider of voice, video, chat and contact center solutions for over one million users worldwide, today announced the acquisition of privately-held Wavecell Pte. Ltd., a Singapore-based global Communications Platform-as-a-Service (CPaaS) provider, for approximately USD $125 million in cash and stock. The acquisition provides 8x8 with an established technology platform and high-growth revenue business to pursue CPaaS globally and represents a natural expansion of 8x8’s cloud business from Unified Communications-as-a-Service (UCaaS), Contact Center-as-a-Service (CCaaS), and Video into the CPaaS market.
Wavecell is expected to further accelerate 8x8’s growth, expand its international presence, and deepen the company's technology capabilities in cloud communications. The acquisition expands 8x8’s presence into the rapidly growing Southeast Asian market, including Singapore, Indonesia, Philippines, Thailand, and Hong Kong, with a talented employee base and more than 500 enterprise customers, including Paidy, Tokopedia and Lalamove. Wavecell also brings an R&D center in Asia which allows 8x8 to further accelerate growth in product innovation and delivery.
By acquiring Wavecell, 8x8:
- Increases its addressable market to include CPaaS. 8x8 acquires a large scale, well recognized platform for providing SMS, messaging, voice, and video APIs globally to both enterprises and developers.
- Enhances the only fully-owned end-to-end cloud communications platform. 8x8 expands its API offerings, making it the only cloud provider able to natively offer both pre-packaged contact center, communications and video solutions as well as open APIs to embed communications into an organization’s core business processes.
- Expands its global presence and coverage. 8x8 increases its marketing, sales and support presence across the Asia Pacific region, including local offices in five Asian countries. It also expands its global voice and messaging network with relationships and contracts across more than 190 carriers globally, including extensive coverage across Asia.
8x8 Enters CPaaS Market
Founded in 2010, Wavecell offers a complete CPaaS solution including a cloud-first API platform with SMS, chat apps, video interaction and voice APIs that enable mission-critical enterprise applications such as Application-to-Person (A2P) messaging, omnichannel customer journeys and multi-factor authentication at scale. Global market intelligence firm IDC forecasts the worldwide voice and text messaging communications platform-as-a-service market to grow to $10.9 billion in 20221.
“The market opportunity in CPaaS is growing rapidly, and this acquisition enables us to quickly provide these services to our customers around the world,” said Vik Verma, CEO of 8x8. “8x8 is now the only cloud provider that owns the full, global-scale, cloud-native technology stack offering voice, video, messaging, and contact center delivered both as pre-packaged applications and as enterprise-class APIs. We’re excited to welcome the Wavecell employees to the 8x8 family. We now have a significant market presence in Asia and expect to continue to expand in the region and globally in order to meet evolving customer requirements.”
“With the acquisition of Wavecell, we can now offer customers enterprise-class APIs, bringing a CPaaS solution to our global communications platform,” said Dejan Deklich, Chief Product Officer of 8x8, Inc. “Customer demand for CPaaS is accelerating and now organizations can easily add real-time communication capabilities that include SMS, chat apps, voice and video to improve the experience for their end-customers. The integration of all the API’s and data into one CPaaS platform gives 8x8 customers unprecedented ability to engage with end users in true omni-channel fashion and understand the full customer journey.”
“We are delighted to become part of 8x8, one of the world’s leading cloud communications platforms. Now is the right time to leverage the global expansion of UCaaS, CCaaS and CPaaS services to better serve our customers’ growing demand for communication services and to continually drive greater innovation,” said Olivier Gerhardt, CEO and Co-Founder of Wavecell.
Enhancement of 8x8’s Cloud Technology Platform
The acquisition brings enhanced omni-channel CPaaS capabilities to 8x8’s cloud communications platform with SMS, chat, voice, and video coverage globally. For example, with 8x8, many companies within the insurance, healthcare, customer support sector and more can avoid the expense of physically sending agents onsite and can instead use embedded video conferencing to evaluate and attend to cases virtually, speeding up handling time and cost effectiveness.
Customers are increasingly looking to automate critical workflows and access all communications data in a single repository to be able to apply advanced analytics and machine learning algorithms for new business insights. Wavecell will enable 8x8 customers to advance these initiatives with unique insights across all of their customer interactions - from employees, to contact center agents and now automated workflows. 8x8 customers in key verticals such as healthcare, financial services and retail will be able to quickly configure 8x8's voice, video, messaging and analytics to meet their regulatory compliance requirements or build unique customer experiences across multiple channels.
Wavecell has also built a robust enterprise developer community over the past several years which has leveraged its API platform and software development kits to enable their organizations’ digital transformation initiatives, bringing real-time communications to customer engagement and creating differentiated customer experiences. 8x8 can now enable application providers, enterprise developers, and customers to easily and quickly access and natively integrate their enterprise applications with 8x8's voice, video and messaging services.
8x8 Further Extends Global Market Reach and Coverage
Wavecell provides global coverage for multi-channel communications spanning 190 countries through relationships with 192 network operators worldwide and business partners such as WhatsApp. Its carrier-grade infrastructure enables customers to share more than two billion messages per year across these channels. This global network enables Wavecell customers such as Lalamove, Asia’s leading local delivery platform, to use SMS to immediately notify customers of their ordering and delivery requests. The acquisition extends 8x8’s global carrier relationships and network support to hundreds of additional carriers, enabling 8x8 to further optimize its global service delivery for enterprise customers anywhere they operate around the world.
Transaction Terms and Financial Impact
Under the terms of the agreement, 8x8 acquired Wavecell for total consideration of approximately USD $125 million, which represents a multiple of less than 4x anticipated Wavecell calendar 2019 revenue. This is comprised of approximately USD $69 million in cash and approximately USD $56 million in 8x8 common stock, of which approximately USD $12 million of common stock is subject to certain vesting restrictions over a three-year period, for a net U.S. GAAP purchase price of approximately USD $113 million. The purchase price is subject to customary adjustments as well as holdback and escrow arrangements per the terms of the agreement.
Going forward, the company expects the Wavecell business to be accretive to 8x8’s revenue growth rate and have a minimal impact on the full-year fiscal 2020 non-GAAP pre-tax loss.
In conjunction with the announcement of the Wavecell acquisition, 8x8 also today reiterated its previously-issued financial guidance for the first quarter of fiscal 2020 for all metrics. 8x8 management will discuss additional details of the acquisition and the anticipated financial impact on the business during its previously scheduled Q1 fiscal 2020 earnings conference call on July 30, 2019, at 2:00 p.m. pacific time.
New Employee Inducement Grants
In connection with the acquisition of Wavecell, 8x8 also granted restricted stock units for up to 207,509 shares of the company’s common stock to 69 employees. The awards vest over periods of one to three years, subject to the recipient’s continuing employment or other association with 8x8 or any of its subsidiaries. The awards were approved by a majority of 8x8’s independent directors as material inducements to the hiring of new employees, in accordance with New York Stock Exchange Rule 303A.08 and 8x8’s 2017 New Employee Inducement Incentive Plan.
Forward Looking Statements Disclaimer
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to, among other things, expansion of 8x8’s presence internationally, including in Southeast Asia, the expected future revenue growth of Wavecell and the acceleration of 8x8’s revenue growth, expansion of 8x8’s cloud business into the CPaaS market, future growth in product innovation and delivery, future product integrations and enhancements between Wavecell and 8x8’s products, 8x8’s previously issued guidance, as well as 8x8’s expectation that the acquisition of Wavecell will be accretive to 8x8’s revenue growth rate and have a minimal impact on full-year fiscal 2020 non-GAAP pre-tax loss. These forward-looking statements are based on 8x8’s current expectations, estimates and projections about its business and industry, management’s beliefs and certain assumptions made by 8x8, all of which are subject to change. Forward-looking statements generally can be identified by the use of forward-looking terminology such as, “future”, "believe," "expect," "may," "will," "intend," "estimate," "continue," or similar expressions or the negative of those terms or expressions. Such statements involve risks and uncertainties, which could cause actual results to vary materially from those expressed in or indicated by the forward-looking statements. Factors that may cause actual results to differ materially include customer acceptance and demand for our cloud communication and collaboration services, the quality and reliability of our services, customer cancellations and rate of churn, our ability to scale our business, risks relating to our strategies and objectives for future operations, including the execution of integration plans and realization of the expected benefits of our acquisitions, timing and extent of improvements in operating results from increased spending in marketing, sales, and research and development, as well as the other potential factors described under "Risk Factors" included in 8x8’s Annual Report on Form 10-K for the year ended March 31, 2019 and other documents of 8x8, Inc. on file with the Securities and Exchange Commission (available at www.sec.gov). 8x8 cautions you not to place undue reliance on forward-looking statements, which reflect an analysis only and speak only as of the date hereof. 8x8 assumes no obligation to update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release, except as required by law.
[1] Source: IDC - Worldwide Voice and Text Messaging Communications Platform-as-a-Service Forecast, 2018–2022, Courtney Munroe, May 2018
About 8x8, Inc.
8x8, Inc. (NYSE: EGHT) cloud solutions help businesses transform their customer and employee experience. With one system of engagement for voice, video, chat and contact center and one system of intelligence on one technology platform, businesses can now communicate faster and smarter to exceed the speed of customer expectations. For additional information, visit www.8x8.com, or follow 8x8 on LinkedIn, Twitter, and Facebook.
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