Synacor and Qumu Corporation Agree to Merger in All-Stock Transaction

The deal has been structured as an all-stock deal and is expected to close mid-2020. Under the terms and conditions of the merger agreement, each share of Qumu common stock issued and outstanding from the date of the merger will be converted into approximately 1.61 shares of Synacor common stock

FREMONT, CA: Cloud-based software and services company Synacor and leading provider of tools to create, manage, secure, distribute and measure the success of live and on-demand video for the enterprise Qumu Corporation have agreed to combine in an all-stock transaction. The strategic collaboration will bring together Qumu’s Enterprise Video platform with Synacor’s Cloud ID Identity & Access Management platform, and the Zimbra Email & Collaboration platform.

The merger is aimed to help improve operating scale and strengthen global presence for both companies. The combined business venture is expected to generate over USD 120 million in annual revenue on a Pro-forma basis with an estimated USD 70 million of software & services segment revenue. USD 50 million of the annual revenue would be recurring, and about USD 50 million in continuing portal & advertising segment revenue. The merger will also help accelerate Qumu's go-to-market strategy via Synacor’s 1900 plus channel-partners while also strengthening cross-selling opportunities.

“With Synacor having an extensive network of more than 1,900 distribution partners and an established base of more than 4,000 customers, the merger will immediately accelerate our go-to-market efforts,” said Vern Hanzlik, President, and CEO of Qumu. “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, added he.”

The deal has been structured as an all-stock deal and is expected to close mid-2020. Under the terms and conditions of the merger agreement, each share of Qumu common stock issued and outstanding from the date of the merger will be converted into approximately 1.61 shares of Synacor common stock. Upon closing, Synacor stockholders are expected to own about 64.4 percent, and Qumu shareholders are expected to own approximately 35.6 percent of the capital of the combined company.

“This is a strategic and highly synergistic combination that creates operating software scale and accelerates growth,” said Himesh Bhise, CEO of Synacor. “Together with Qumu, we will be a software-focused business with about $50 million of high-margin recurring revenue, positioned in the attractive Collaboration product segments of Email, Identity, and Video, with an enviable customer base that spans Enterprise, small and medium business, Government, Service Providers, Content Providers, and Publishers. Our portal and advertising business will continue to meaningfully contribute to Synacor’s top and bottom line, as we benefit from the expanded scale and scope of our software and services segment. This is an exciting day for the employees, customers, and shareholders of Qumu and Synacor.”

Post the merger, Himesh Bhise will continue as Chief Executive Officer and Tim Heasley as Chief Financial Officer of Synacor. Vern Hanzlik will join Synacor as Chief Revenue Officer for Software and Services. The board of directors for the combined company will consist of seven members, three appointed by Synacor and two by Qumu and Synacor CEO Himesh Bhise. The new board of directors will then search for a seventh board member with software and SaaS experience who is anticipated to serve as Chairperson of the combined company.