AVCT Ties Up Kandy Acquisition

American Virtual Cloud Technologies (Nasdaq: AVCT) today announced, along with Ribbon Communications (Nasdaq: RBBN), the close of the previously announced acquisition of Kandy (News - Alert) Communications by AVCT.

AVCT continues to make big moves in the fast-growing Communications Platform as a Service (CPaaS) Unified Communications as a Service (UCaaS) and Cloud Communications as a Service (CCaaS) domains, and in so doing is creating an end-to-end Cloud Managed Services company complementing their existing IT managed cloud services offerings.

The company acquired Stratos (News - Alert) Management Systems (dba Computex Technology Solutions) in April of this year and recently announced the appointment of industry veteran and visionary Xavier Williams as Chief Executive Officer.

Williams served in a number of leadership capacities over the past 30 years at AT&T (News - Alert) (NYSE: T) across multiple disciplines including finance, strategy, sales, product management, global operations, and human resources and, in his most recent role as President of AT&T's Public Sector and FirstNet, Mr. Williams had profit & loss and operational responsibility for a global team of 4,000 professionals responsible for delivering solutions to federal, state, and local government agencies, colleges, universities, K-12 schools as well as for FirstNet, the $40+ billion nationwide wireless broadband network for first responders.

With Williams at the helm, the former software and cloud applications platform, established five years ago at the dawn of WebRTC and the advent of programmable and embedded real-time communications breakthroughs is extremely well-positioned to address the needs of businesses, enterprises, and organizations for highly reliable, secure, and scalable communications platforms. The popularity of sophisticated solutions that improve Customer Experience (CX) is also a driver, including the rapid rise of Contact Center as a Service, delivered via the cloud, which has exploded this year in the context of COVID-19 and work-from-home mandates.

AVCtechnologies offers end-to-end services spanning from managed IT solutions, managed services, and cloud communications, delivered by certified experts to business customers, service providers, independent software vendors, and system integrators.

AVCtechnologies is positioning itself as a "premier white label provider of choice for UCaaS, CCaaS, and CPaaS."

"We are very pleased to welcome Kandy to the AVCtechnologies family," said Xavier Williams, Chief Executive Officer of AVCtechnologies. Williams added, "Kandy will be our linchpin, enabling us to provide carrier-grade, global cloud communications that address the needs of medium and large enterprises. As the velocity of public, hybrid, and private cloud communications continues, we are in a fortunate position to be able to focus on execution while competitors in our space need to concentrate on platform capabilities, global expansion, and improved customer experience. Kandy's world-class, globally deployed, carrier-grade, white-labeled proprietary communications platform gives AVCtechnologies the ability to solve customer communication needs. Kandy's platform, significant growth trajectory, and global marquee customer and partner base, including AT&T, City of Los Angeles, IBM (News - Alert), and Etisalat (the largest telecom provider in the UAE), accelerates our go to market plans and enables us to expand our award-winning portfolio."

Bruce McClelland, Ribbon's CEO, stated, "We are impressed with the depth of talent and vision of the AVCtechnologies' management team and believe that with the addition of the innovative Kandy team, the company will continue to provide excellent service to channel partners and customers.  We are confident that AVCT is poised to unlock additional value with Kandy, and we are excited to be a shareholder of the company."

The transaction was completed pursuant to the terms of an amended and restated purchase agreement. At the closing, AVCT issued to Ribbon units of securities consisting of convertible debentures in an aggregate principal amount of approximately $45 million and warrants to purchase an aggregate of approximately 4.5 million shares of AVCT's common stock for an exercise price of $0.01 per share. The purchase price is subject to adjustment based on the net working capital of the Kandy business as of the closing date. In connection with the closing of the transaction, an affiliate of Navigation Capital Partners, Inc. entered into a subscription agreement with AVCT, pursuant to which it purchased $10 million in the same units of securities issued to Ribbon and committed to purchasing up to an additional $25 million of such units to provide the company working capital to fund its anticipated growth.