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Fusion and Birch

Every article just quoted the same paragraphs, including this very confusing one:

 "The Fusion/ Birch deal is an all-stock transaction in which Birch shareholders will receive about 73 million in common shares of Fusion valued at $3.85 per share and thus hold investments in the combined entity. That represents a premium of more than 200 percent compared to the prior trading day’s closing price. That, the release says, is five times the pro forma adjusted EBITDA of the business that is being acquired, including anticipated synergies."  [fierce]

By the numbers:

  • 73 million shares at $2.59 is $189m in stock value... Fusion shareholders will own 25% of the combination while Birch shareholders will own 75%. (Shareholder lawsuits will happen.) 
  • FSNN has had a 52 week high of $2.59. It is at $2.21 right now.<< how is the stock valued at $3.85??? 
  •  Fusion started the day with a market cap of $27.6M. 
  • FSNN is assuming Birch debt of $458M 
  • Prior to closing, Fusion will exit its Carrier Services business. How much revenue is that?
  • Going forward, the strategy is more acquisitions because Organic Growth is (2%-4%)!! 
  • Customer acquisition costs via M&A will be substantially lower than that of peers spending 50%-55% of revenue on Sales & Marketing expense to drive similar growth. 
  • Fusion ended the quarter with approximately 13,100 Business Services customers 
  • FSNN ended the quarter with an ARPU of $751, compared to $539 at June 30, 2016 
  • Fusion's consolidated revenue grew 23% in Q2 2017 to $38.1 million due primarily through the acquisition of Apptix  [release]
  • Now $150m in annual revenue for Fusion – but $575m after????? 
 "The new firm will have more than 150,000 business customers, 30 data centers, 31,000 fiber route miles and metro fiber assets in 11 major markets." Again, Not really: "The combined North American IP-Network is expected to include ~31K fiber route-miles, presence in 30 data centers, metro fiber in 11 major markets, MPLS, SD-WAN, and an extensive NNI Platform which results in greatly increased sales opportunities for multi-location customers."

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