Ireland's Blueface in $500m merger with US peer to create global player
Irish communications company Blueface has agreed a merger deal with a bigger US rival, Star2Star, that will create a business understood to be worth $500m.
The merger will make the merged StarBlue a top five global provider in the growing unified communications market.
Blueface provides internet-based phone services for businesses. The merger comes less than a year after the BDO Development Capital Fund supported a €10m funding round for the fast-growing firm.
Blueface backers include brewing heir Edward Guinness, the Earl of Iveagh, and his family, who are set to remain involved in the company following the merger.
The management team led by Alan Foy also took a stake in the business in 2011 and backers included Enterprise Ireland.
The BDO Development Capital Fund has exited the business.
The merger is a "game-changing event" in the unified communications as a service (UCaaS) landscape, according to Blueface CEO Alan Foy.
He will become group CEO of Star2Star and Blueface following the merger and said that it "combines the best of proprietary UCaaS technology with an expansive geographic distribution, capability and reach."
Mr Foy continued: "It positions the combined Blueface and Star2Star company as one of the leading platform and service providers that can service businesses of all sizes, partners and wholesale customers."
He told the Irish Independent that Star2Star would continue to expand in North America, while Blueface would also continue its expansion in the EMEA region. "The company plans to launch into new markets through both organic growth and acquisitions," he said.
Following the deal, Norman Worthington, CEO of Star2Star, will become executive chairman of Star2Star and Blueface.
Florida will remain the North American headquarters for Star2Star, while Dublin will remain as the European HQ.
Founded in 2004, Blueface's proprietary cloud voice unified communications platform services business customers of all sizes. Initially focused on the residential market, in 2010 the company launched its business-to-business offering.
In 2011, it established its UK business and the following year Blueface acquired Kebu in Italy to form Blueface Italia. Blueface considered a stock market flotation in early 2016, but abandoned the plan, citing market volatility and cultural and integration difficulties relating to two potential acquisitions. Also in 2016, the company expanded into the US, France, Germany and Spain.
Blueface was advised on the merger by Mason Hayes & Curran, Grant Thornton (Dublin) and Q Advisors. Star2Star was advised by Pepper Hamilton, Grant Thornton (Atlanta) and Spurrier Capital.