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Wednesday, February 24, 2021

Fusion to Acquire Birch

Fusion plans to acquire the cloud and business services customers, operations and infrastructure of privately-held Birch Communications, for an undisclosed sum.

The combination of the two, which both have strong channel programs, will have more than 150,000 business customers and a 100-percent IP-based network, including 30 data centers, 31,000 fiber route-miles of network, and metro fiber assets in 11 major markets. The combined customer base will represent monthly recurring revenue comprising approximately 87% of total revenue.

The acquisition will not include Birch’s legacy consumer and single-line business customers, which have lower profitability and average revenue per customer (ARPU) as well as higher churn rates.

Fusion offers integrated cloud solutions over a single platform.

“This acquisition is a major milestone in Fusion’s targeted and disruptive strategy of becoming the leading single-source cloud services provider to business and enterprise customers,” said Matthew Rosen, Fusion CEO. “Customers increasingly demand an end-to-end experience that is reliable as well as efficient and innovative. Fusion is well positioned to provide these services having been first-to-market to pursue this strategy, and can now do so with increased scale and resources.”

Rosen continued, “This combination will immediately move Fusion into the top tier of cloud services providers and establishes a robust platform from which to pursue aggressive value enhancing initiatives through both organic growth and strategic acquisitions. By leveraging the significantly larger scale of Fusion following the acquisition, the company will gain new efficiencies and greater cash flows, which we believe will drive shareholder value. We also expect that the new Fusion will gain broader awareness among investors and analysts, along with expanded access to the capital markets, which will further support our compelling growth strategy.”

Vincent Oddo, CEO at Birch Equity Partners, added, “Matthew Rosen and his team have a unique and compelling strategy for addressing the challenges that so many businesses face when migrating to the cloud. Time and again, Fusion has demonstrated its ability to deliver innovative and integrated customer solutions, firmly establishing the company as the ideal partner for Birch. We are confident that the combination of our two companies will create significant value for our customers and all stakeholders.”

He continued, “Our common vision for the future, commitment to service excellence and culture of innovation provide a great foundation for the integration of our teams and our ability to attract customers with compelling cloud-based solutions. We are excited to participate in Fusion’s ongoing success as shareholders in the combined company.”

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