Sonus Networks, Inc. (NasdaqGS:SONS) signed a definitive agreement to acquire GENBAND US LLC from a group of sellers for approximately $410 million in a merger of equals transaction on May 23, 2017. Under the terms of the agreement, Sonus and GENBAND will combine under a newly formed holding company. Each Sonus shareholder will receive one share of common stock in the combined company for each existing Sonus share they own. The combined company will issue approximately 50 million shares of common stock to GENBAND's equity owners as well as $22.5 million of consideration in the form of an unsecured note. Upon closing of the transaction, Sonus and GENBAND shareholders are each expected to own approximately 50% of the combined company on a fully diluted basis. Sonus Networks will pay termination fees of $14.5 million to GENBAND in case the transaction gets terminated.

For the fiscal year ended December 31, 2016, Genband reported revenues of $427.1 million and EBITDA of $23.6 million. Raymond Dolan will be the Chief Executive Officer of the combined company, David Walsh will oversee the Kandy business, a division of the combined company currently GENBAND's cloud communications platform as a service (CPaaS) for global service providers and enterprises and also will assist with the integration of the businesses. Daryl Raiford, Chief Financial Officer of GENBAND, will serve as Chief Financial Officer of the combined company. Management of combined entity will include David Walsh, Mike Swade, Patrick Joggerst, John McCready, Jeff Snider and Steven Bruny. Post transaction Kevin Riley will become Global Chief Technological Officer including overseeing Growth related Research and Development. Bill Parks will become Chief Information Officer. The Board of Directors of the combined company will have five representatives designated by GENBAND and four representatives designated by Sonus. Sonus designees will include Richard Lynch, current Chairman of Sonus and former Chief Technology Officer of Verizon, who will serve as Chairman. The board of directors is expected to consist of Raymond P. Dolan, Kim S. Fennebresque,Bruns H. Grayson, Franklin (Fritz) W. Hobbs, Beatriz V. Infante, Kent J. Mathy, Scott E. Schubert and Rick W. Smith.

The transaction is subject to the Sonus and GENBAND shareholder approval, listing of the combined company's common stock on Nasdaq, Hart-Scott-Rodino review, registration statement effectiveness and other customary closing conditions. The transaction has been unanimously approved by the Boards of Directors of both companies. As of June 29, 2017, the Federal Trade Commission granted the early termination notice. On September 25, 2017, the registration statement on Form S-4 filed by Sonus Networks has been declared effective by the Securities and Exchange Commission. The transaction was previously expected to close in the second half of 2017; As on September 25, 2017, the transaction is expected to close in the fourth quarter of 2017. The transaction is expected to be accretive to the Sonus' Non-GAAP EPS in 2018 and at least $100 million in annual EBITDA is expected following full impact of annualized synergies and projected EBITDA of fiscal year 2020 is to be approximately $140 million.

Evercore served as the financial advisor and Jay E. Bothwick and Joseph B. Conahan of Wilmer Cutler Pickering Hale and Dorr LLP served as legal advisor to Sonus. Guggenheim Securities and J.P. Morgan Securities LLC served as financial advisor and David S. Allinson and David Allinson, Louise Gong, Didi Teng, Nicole Foster, Michael Young, Jeffrey Tochner, Bradd Williamson, Austin Ozawa, Max Raskin, Joshua Tinkelman, Alex Harris, Matthew Dewitz, Alan Kimball, Michael Egge, John Colahan and Farrell Malone of Latham & Watkins LLP served as legal advisors to GENBAND in this transaction. Don McDermett, Grant Everett and Ian Lurie of Baker Botts acted as legal advisors to the Special Committee of the Board of Directors of GENBAND Holdings Company. Phx Corporate advised Sonus Networks, Inc. on its merger of equals with GENBAND