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Intermedia’s owner explores sale of communications services firm -sources
Global Banking & Finance Review®
Company
By Milana Vinn
(Reuters) – The private equity owner of Intermedia Cloud Communications is exploring options including a sale that could value the communications services provider at more than $1 billion, including debt, according to people familiar with the matter.
Buyout firm Madison Dearborn Partners is working with investment bank Evercore on a sale process for Intermedia, which is expected to start in the coming weeks, the sources said, requesting anonymity because the discussions are confidential.
Intermedia is aiming for a valuation of more than 20 times its 12-month earnings before interest, taxes, depreciation, and amortization of about $50 million, the sources said.
Intermedia, Madison Dearborn and Evercore did not respond to requests for comment.
Founded in 1993, Intermedia provides cloud-based communications services, including voice calling, video conferencing and chat services to enterprise customers. The Sunnyvale, California-based company caters to customers across several industries, including healthcare, financial services, and retail.
In patient care, for instance, Intermedia has tie-ups with healthcare-technology firms such as Athenahealth, Allscripts, and Cerner, and its communications tools help connect in-office and remote employees with patients to provide virtual care.
Intermedia counts more than 135,000 small and medium-sized businesses among its customers, according to the company’s website.
Madison Dearborn Partners bought Intermedia in 2017 from Oak Hill Capital Partners for an undisclosed amount. The Chicago-based buyout firm has raised about $28 billion across eight funds and backed more than 150 companies since its founders established it as an independent firm in 1992, according to its website.
(Reporting by Milana Vinn in New York; Editing by Lisa Shumaker)
Private equity refers to investment funds that buy and restructure companies not listed on public exchanges. Investors in private equity typically seek to improve the company's performance before selling it for a profit.
Investment banking is a division of banking that helps companies raise capital by underwriting and issuing securities. It also provides advisory services for mergers and acquisitions.
Cloud communications refer to communication services delivered over the internet, including voice, video, and messaging. They enable businesses to connect and collaborate without traditional phone systems.
A valuation is the process of determining the current worth of an asset or a company. It is essential for investment decisions, mergers, and acquisitions.
EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a financial metric used to evaluate a company's operating performance.
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