Communications Systems, Inc. Acquires IVDesk’s Operating Assets
November 04 2020 - 4:05PM
Business Wire
Acquisition is immediately accretive and
provides predictable, recurring DaaS revenue
Communications Systems, Inc. (NASDAQ: JCS) (“CSI” or the
“Company”), an IoT intelligent edge products and services company,
today announced that its JDL Technologies subsidiary has acquired
the operating assets of privately held IVDesk. The transaction was
structured as an asset purchase under which JDL paid $950,000 cash
at closing with up to an additional $550,000 cash payment
contingent on an earn-out tied to customer retention.
Based in Minnetonka, Minnesota, IVDesk provides time-tested,
market-proven and easy-to-use private cloud services to small- and
mid-size businesses (SMB), with a particular focus on the financial
services industry. IVDesk currently services over 85 customers
across the US with a focus on a tri-state region with Minnesota at
the center. IVDesk’s business model is built on monthly recurring
revenue.
Roger Lacey, CEO of CSI noted, “IVDesk’s Desktop-as-a-Service
(DaaS) platform fits well with JDL Technologies’ business
operations in the Company’s Services and Support segment, bringing
significant resources and experience in cloud-delivered
applications and vertical specialization. The acquisition of the
IVDesk assets, combined with CSI’s May 2020 acquisition of Ecessa
and its recent minority investment in Quortus, a UK-based company
that creates agile and feature-rich private wireless networks, has
substantially increased the depth and quality of our services. CSI
is now able to provide its clients with a wider range of innovative
solutions that address their increased security sensitivities, a
cloud migration path and the ability to establish the more robust
and always-available network that a modern workforce requires.”
Mr. Lacey added, “As we continue to expand our businesses
through attractive acquisitions and partnerships, we have entered a
new phase for CSI and are diligently working on launching a
Company-wide re-branding strategy.”
Scott Fluegge, General Manager of JDL, noted, “IVDesk has been
providing a fully redundant and highly available private cloud
platform to its SMB clients who often face different IT challenges
due to limited internal IT resources and are struggling to keep up
with constantly increasing security needs that are now common to
all industries. IVDesk provides easy-to-integrate and
cost-effective solutions that are designed to solve these
challenges. IVDesk shares JDL’s high-touch customer-centric values,
which clients demand from an always-on and ever-advancing cloud
solution.”
Advisors
Northland Capital Markets served as financial advisor to CSI in
connection with the transaction and Ballard Spahr LLP acted as
legal counsel to CSI.
Additional Information
Communications Systems, Inc. will provide additional information
about the IVDesk transaction in future filings with the Securities
and Exchange Commission.
About Communications Systems
Communications Systems, Inc., an IoT intelligent edge products
and services company, provides connectivity infrastructure and
services for global deployments of broadband networks. Focusing on
innovative, cost-effective solutions, CSI provides customers the
ability to deliver, manage, and optimize their broadband network
services and architecture. From the integration of fiber optics in
any application and environment to efficient home voice and data
deployments to optimization of data and application access, CSI
provides tools for maximum utilization of the network from the edge
to the user. With partners and customers in over 50 countries, CSI
has built a reputation as a reliable global innovator focusing on
quality and customer service. CSI operates under its Electronics
& Software and Services & Support operating segments. For
more information visit: commsysinc.com.
Forward Looking Statement
This press release includes certain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995, including statements regarding future financial
performance, future growth and future acquisitions or partnerships.
These statements are based on Communications Systems’ current
expectations or beliefs and are subject to uncertainty and changes
in circumstances. Actual results may vary materially from those
expressed or implied by the statements here due to changes in
economic, business, competitive or regulatory factors, and other
risks and uncertainties affecting the operation of Communications
Systems’ business, as well as CSI’s ability to successfully and
profitability integrate IVDesk’s customers into CSI’s operations.
These risks, uncertainties and contingencies are presented in the
Company’s Annual Report on Form 10-K and, from time to time, in the
Company’s other filings with the Securities and Exchange
Commission. The information set forth herein should be read in
light of these risks. Further, investors should keep in mind that
the Company’s financial results in any particular period may not be
indicative of future results. Communications Systems is under no
obligation to, and expressly disclaims any obligation to, update or
alter its forward-looking statements, whether as a result of new
information, future events, changes in assumptions or
otherwise.
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version on businesswire.com: https://www.businesswire.com/news/home/20201104005591/en/
Communications Systems, Inc. Mark D. Fandrich Chief
Financial Officer 952-582-6416 mark.fandrich@commsysinc.com Roger
H. D. Lacey Chief Executive Officer 952-996-1674 The Equity
Group Inc. Lena Cati Vice President 212-836-9611
lcati@equityny.com Devin Sullivan Senior Vice President
212-836-9608 dsullivan@equityny.com
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