Telesphere Gobbles Denver Provider

Furthering its aggressive expansion plans, hosted IP telephony provider Telesphere Networks said it will acquire Denver-based Unity Business Networks for an undisclosed sum. The deal marks the first acquisition for Telesphere, which has been growing rapidly and last month landed an additional $15 million in venture funding.

“We’ve been targeting Unity as our first choice of acquisitions,” Telesphere CEO Clark Peterson told VON, noting that the deal has been in the works for some eight months. “They’ve got one of the best customer bases and a business that looks very similar to Telesphere in the hosted PBX space, with great network assets.”

Unity also brings a top-tier back-office operation that will enable Telesphere to continue to grow rapidly, Peterson added. The company grew 60 percent year-over-year in 2008 and expects to better that this year, he said.

The hosted telephony market has been marked over the last year by a “rapid, frightening pace of consolidation,” said Brian Martin, CEO of hosted provider 8X8, Inc., in a recent interview with VON. Mid-tier providers are combining to form larger, more geographically dispersed entities, while incumbent telcos and CLECs are adding hosted services to their portfolio by acquiring start-up providers.

“This acquisition roughly doubles the marketplace for Telesphere,” said Jeff Kagan, a telecom industry analyst based in Atlanta, in a statement.

Founded in 2003, Unity Business Networks was Colorado’s seventh-fastest growing private company in 2007.

“In all reality, we’ve been following a course for some time that would position us for a company like Telesphere to come along, and ask us to jump on board,” said Unity CEO Bob Paulsen, who will join Telesphere as that company’s COO.

Assuming regulators approve the deal, it should close later this year.

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