Combination aims to create leader in cloud-based, real-time communications.

Genband and Sonus this week agreed to merge in a bid to create a leader in cloud-based, real-time communications.

The deal brings together Sonus’ expertise in cloud-based session initiation protocol (SIP), VoLTE and virtualised real-time communications, and Genband’s strength in embedded communications, network modernisation, and unified comms. Sonus and Genband will each own 50% stake of the company.

"The transaction is expected to generate significant near-and-long-term value for shareholders, who we believe will benefit from their ownership in a combined company with increased scale and resources to invest in and accelerate each company’s growth initiatives," said Raymond Dolan, CEO of Sonus, in a statement on Tuesday.

"Genband has an outstanding reputation in the market with a talented team and products that are highly complementary to Sonus," he added.

The combined company’s 2016 revenue and EBITDA came in at around $680 million (€607.7 million) and $50 million respectively.

The merger will create a company with an enterprise value of approximately $745 million. It is expected to generate annual cost synergies of about $40 million-$50 million by the end of 2018.

"We are delighted to combine with Sonus at a time when the world’s largest service providers and enterprises accelerate the modernisation and transformation of their networks," said Genband CEO David Walsh.

Sonus’ Dolan will lead the merged company, while Walsh will head up Genband’s Kandy communications platform.

The transaction is expected to close in the second half of 2017, subject to shareholder approval, and other customary closing conditions.