West Corp. on Tuesday proposed to buy France’s Genesys Conferencing and pair it with its InterCall Inc. division to create the largest conferencing provider in North America and Europe. And by all indications, the deal looks good for channel partners.
West, headquartered in Omaha, Neb., made a “friendly tender offer” of $268.8 million for Genesys, which the Genesys board said it supports. That’s probably because the amount represents a 50 percent premium above the closing price of Genesys’ shares on Feb. 18. West plans to use cash and credit to fund the Genesys purchase; the acquisition should close during the second quarter.
The proposed deal doesn’t appear to have raised any financial red flags – Standard & Poor’s Ratings Services didn’t change its ratings on West following the Feb. 19 announcement. Analysts only said that if West keeps making acquisitions and its debt load exceeds a certain amount, “we would consider revising the outlook to negative.”
For now, that doesn’t look likely as West has performed well since its leveraged buyout in 2006. West bought InterCall in May 2003.
Beyond the business aspect, what would such a combination mean for channel partners?
“At this point, it’s probably too early to tell,” said David Pleiss, vice president of investor and public relations for West.
Nor were InterCall executives able to discuss how they’ll likely pull in Genesys channel partners. French law imposes a lengthy quiet period on acquisition dealings. However, Tom Sullivan, InterCall’s channel vice president, was able to talk about how the company integrated channel partners from other buyouts.
InterCall has made several acquisitions, including ECI, Raindance and the conferencing assets of Sprint Nextel Corp. InterCall’s practice each time was to assess the processes of each unit, existing and new, and combine the best parts of each, said Sullivan. Then the provider transferred all partners’ contracts as-is, he said. When the contracts came due for renewal, InterCall folded them “into a bigger InterCall contract that has the same benefits, or far more.” That was especially true for commissions, Sullivan said. InterCall further offered agent and resale models so partners could choose what worked for them.
It’s worth noting that through all of these buyouts, InterCall has remained a steady presence at the industry’s channel-centric events. That hasn’t been true of some telecom M&A; some providers have taken over other, more channel-friendly rivals, and slowed or ended indirect sales. That doesn’t look like the case with Intercall.
Overall, for at least two master agents (others had yet to respond), a Genesys-InterCall union sounds promising.
“InterCall’s done a good job on the acquisition of Raindance,” said Jay Bradley, president of telecom services for Intelisys Corp. “So if we can expect more of the same and have some more product options, and some more focus on the industry from a stronger player, we’re all for it.”
Vince Bradley, president and CEO of World Telecom Group, agreed.
“As a long-time InterCall agent, when West Corp. bought them many years ago, it was a completely seamless experience and things have remained the same, if not better, since that time,” he said in an e-mail to PHONE+. “We had the same experience when West Corp. more recently bought Raindance. Thus, we have no reason to think that there will be any issues with this potential acquisition of Genesys and are excited about it.”
It appears InterCall is thinking along the same lines. In a detailed press release, West said it wouldn’t “modify” InterCall or Genesys activities, “in particular with respect to multimedia.”
“West will provide its audio, video and Web conferencing services through both InterCall’s existing sales organization and Genesys’ sales organization,” the release stated, which implies – although certainly doesn’t confirm – continued reliance on the indirect channel.
That’s not to say there wouldn’t be some reorganizing. Genesys and InterCall products do have some overlap. Still, Genesys brings unified communications capabilities to the mix, as well as strong footing in vertical markets.
West owns several communications holdings, including outsourced contact centers that employ home-based veterans as agents. According to its Securities and Exchange Commission filings, conferencing contributed to a 17 percent increase in revenue during the fourth quarter of 2007, over the same period a year earlier.