Digerati Provides Update on its Planned Acquisition of Nexogy, Inc.
SAN ANTONIO, Texas, Dec. 10, 2019 (GLOBE NEWSWIRE) -- Globe Newswire - Digerati Technologies, Inc. (OTCQB: DTGI) ("Digerati" or the "Company"), a provider of cloud services specializing in UCaaS (Unified Communications as a Service) solutions for the business market, is pleased to provide an update to its previously announced definitive agreement to acquire Nexogy, Inc. (“Nexogy”), a leading provider of cloud communication and broadband solutions tailored for small to medium-sized businesses.
On September 24, 2019, Digerati reported that it anticipated closing the transaction in approximately ninety (90) days, subject to FCC regulatory approval. The FCC regulatory approval process remains ongoing and is expected to continue into January 2020, therefore extending the anticipated timeline for closing previously reported by the Company.
The business combination of Digerati’s operating subsidiary, T3 Communications, Inc. (“T3”) and Nexogy brings together two emerging cloud communication providers serving a broad range of customers in various industries including banking, healthcare, financial services, legal, insurance, hotels, real estate, staffing, municipalities, food services, and education. The transaction will result in a cloud communications provider serving over 24,000 business users in Florida and Texas. The Company anticipates producing nearly 20% in operational EBITDA with synergies derived from the combined operation that includes the consolidation of telecommunications infrastructure and integration of cloud PBX platforms and back-office systems.
Arthur L. Smith, Chief Executive Officer of Digerati, commented, "In addition to working through the regulatory approval process, we have been working closely with Nexogy’s management team in developing a post-closing tactical plan and identifying opportunities for growth and operational efficiencies. Our tactical planning has validated that Nexogy aligns perfectly with our strategic plan and meets the geographic, financial, and technoogical criteria of our disciplined M&A strategy. On a trailing twelve months (TTM) pro forma basis, the combined business continues on track to produce $12.7 million in annual revenue supported by strong and predictable recurring revenue under long-term contracts and high gross margins of 75%. We are even more excited about the tremendous value these attributes will bring to our combined offerings in the lucrative markets we serve in Texas and Florida, and I expect the deal to be immediately accretive to earnings and have a positive effect on net equity.”
About Nexogy, Inc.
Nexogy is a leading provider of unified communications as a service (“UCaaS”) and managed services, offering a portfolio of cloud-based solutions to the small to medium-sized business market and serving over 1,500 business accounts and 14,000 users across various industries including Education, Health Care, Financial Services, and Real Estate. Based in Miami, Nexogy is a single-source provider that allows businesses and multi-location organizations to leverage flexible, cloud-based services without the need for high capital expenditures required for legacy systems. The product set include a diverse cloud solution consisting of voice PBX, broadband data, collaboration, and managed services. For more information about Nexogy, please visit www.nexogy.com.
About Digerati Technologies, Inc.
Digerati Technologies, Inc. (OTCQB: DTGI) is a provider of cloud services specializing in UCaaS (Unified Communications as a Service) solutions for the business market. Through its subsidiary T3 Communications (www.T3com.com), the Company is meeting the global needs of businesses seeking simple, flexible, reliable, and cost-effective communication and network solutions, including cloud PBX, cloud mobile, Internet broadband, SD-WAN, SIP trunking, and customized VoIP services, all delivered on its carrier-grade network and Only in the Cloud™. For more information about Digerati Technologies, please visit www.digerati-inc.com.
Forward Looking Statements
The information in this news release includes certain forward-looking statements that are based upon assumptions that in the future may prove not to have been accurate and are subject to significant risks and uncertainties, including statements related to the future financial performance of the Company. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, it can give no assurance that such expectations or any of its forward-looking statements will prove to be correct. Factors that could cause results to differ include, but are not limited to, successful execution of growth strategies, product development and acceptance, the impact of competitive services and pricing, general economic conditions, and other risks and uncertainties described in the Company's periodic filings with the Securities and Exchange Commission.
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