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Exclusive: Business communications services provider 8x8 explores sale - sources
February 24, 2017 / 8:42 PM / 10 months ago

Exclusive: Business communications services provider 8x8 explores sale - sources

(Reuters) - 8x8 Inc EGHT.O, a U.S. provider of internet-based voice and communication services to businesses, is exploring a potential sale of the company, people familiar with the matter said on Friday.

The move comes amid a wave of consolidation in the telecommunications software and equipment industry, as smaller players such as 8x8 seek more scale to compete against bigger rivals such as Cisco Systems Inc (CSCO.O).

8X8 has been working with Morgan Stanley (MS.N) to field interest from other companies and private equity firms, the people said. There was no certainty that these talks will continue or that they will lead to a deal, the people added.

The sources asked not to be identified because the negotiations were confidential. 8x8 and Morgan Stanley did not immediately respond to requests for comment.

8x8 shares rose as much as 14 percent on the news and ended trading up 10 percent at $16.15 in New York on Friday, giving the company a market capitalization of close to $1.5 billion.

Based in San Jose, California, 8x8 competes with companies in the so-called voice over internet protocol (VoIP) sector, including RingCentral Inc (RNG.N), Vonage Holdings Corp (VG.N) and Shoretel Inc SHOR.O.

8x8 charges corporate clients such as McDonald’s Corp (MCD.N) and GameStop Corp (GME.N) monthly fees for access to its internet telephone services to help run their stores and offices. It has also branched out into call center software services in recent years.

    Last month, telephony services provider Avaya Inc filed for Chapter 11 bankruptcy as it struggled with its debt load. 8x8 Chief Executive Vik Verma has said that Avaya was a more traditional enterprise company than companies like 8x8 that have diversified into cloud-based services.

    “If I had a Cessna that I could get, I would put a sign on it that says 8x8 welcomes any potential Avaya customers... and fly it around Avaya headquarters,” Verma said on a January earnings call.

    8x8’s quarterly revenue for the three months ended Dec. 31 rose 19 percent to $63.6 million, compared to $53.17 million a year earlier. It narrowed its net loss to $1.3 million, or a loss of 1 cent per share, compared to a net loss of $1.68 million or a loss of 2 cents per share a year ago.

    Reporting by Liana B. Baker in San Francisco and Greg Roumeliotis in New York; Editing by Meredith Mazzilli

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