Lingo Announces Definitive Agreement to Acquire Impact Telecom

Transaction Creates One of the Largest North American Network Service Providers Dedicated to Serving the SMB, Carrier and Consumer Markets

Lingo Communications LLC (“Lingo”), a leading nationwide network service provider dedicated to serving the SMB and consumer markets, announced today that it has entered into a definitive agreement to acquire 100 percent of the equity interests in Impact Acquisition LLC and TNCI Operating Company LLC (collectively, “Impact Telecom”), in an all-cash transaction.

Highlights:

  • Lingo to acquire Impact Telecom, including its customers, operations and network infrastructure
  • Combined company is expected to have total pro forma annual revenue of approximately $175 million and annual Adjusted EBITDA of approximately $24 million, including cost synergies
  • Transaction expected to be significantly accretive to Lingo’s adjusted EBITDA immediately upon closing, leading to approximately $22 million in annual free cash flow
  • Combined company will serve a highly attractive base of approximately 270,000 SMB, carrier and consumer customers throughout North America.

The combination will create one of the largest network service providers in North America, with approximately 270,000 SMB, carrier and consumer customers and three 100 percent Internet Protocol-based networks. The combined customer base demonstrates strong fundamentals, with monthly recurring revenue comprising approximately 90 percent of total revenue and a churn rate below the industry average. In addition, the combined company will enjoy significant opportunities for growth by cross-selling and up-selling its comprehensive suite of SMB, carrier and consumer services.

“This acquisition is a major milestone in Lingo’s strategy to become the leading North American network service provider to SMB, carrier and consumer customers. In addition, this transaction will provide a robust platform from which to pursue additional value-enhancing initiatives including strategic acquisitions,” said Vincent M. Oddo, president and chief executive officer of Lingo. “Customers increasingly demand services that are value-oriented, innovative and supported in a highly personalized manner. The combined company will be uniquely positioned to provide these products and services and will be able to do so with greater scale and resources.”

“The combination of Impact and Lingo is extremely symbiotic and a very natural fit,” said Chuck Griffin, CEO of Impact Telecom. “The commitment to network integrity has earned the trust of both national and international top carriers and will continue to serve as the core infrastructure for the cumulative company. We are highly committed to our distribution channels and this builds even greater width of products to help us serve the SMB and consumer markets.”

Jones Day and Cahill Gordon & Reindel served as legal advisors to Lingo, with Paul Hastings and Morgan Lewis serving as legal counsel to Impact. Stephens Inc. served as exclusive financial advisor to Lingo. Impact Telecom is a portfolio company of an affiliate of Garrison Investment Group.

For additional information visit lingo.com and impacttelecom.com.

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