Verizon's $500 Million Acquisition of BlueJeans

By Ryan Tenerowicz, Charlie Solnik, and Ory Ratoviz (California Polytechnic State University), Chris Leung, and Krystal Yip (University of Warwick) | 4/26/2020

 

Overview of the deal

Acquirer: Verizon Business

Target: BlueJeans Network

Estimated value: USD$400-500M

Announcement date: 16.04.2020

Acquirer Advisors: Debevoise & Plimpton

Target Advisors: Evercore, Goodwin Procter


Telecommunications giant Verizon Business is expected to acquire video-conferencing tool BlueJeans Network for a value between USD$400 million – $500 million, and is due to close in Q2 2020. Verizon has not disclosed further acquisition price or terms.

The estimated USD$400-500 million Verizon has paid for the American video-conferencing platform arguably represents a discount to BlueJeans’ last private valuation. The company was worth just under USD$500 million after a 2013 funding round and in 2015, its valuation was pushed to $728 million. The acquisition could still mean a substantial return for BlueJeans’ external investors that have injected $175 million into the company.

At the time, BlueJeans reached a plateau in growth activity, faced great competition from video-conferencing rivals Zoom and Microsoft Teams accounting for 41% and 21% of the web conferencing market share respectively, and was searching for a large partner to help reach the next level. On the other hand, Verizon was seeking a platform to integrate into its 5G product road-map. Having worked as a BlueJeans authorized re-seller, Verizon found that the trusted meeting platform fitted perfectly into Verizon’s plan of expanding its unified communications portfolio. The combination of BlueJeans’ world class video platform and trusted brand with Verizon’s computing innovation will deliver highly differentiated solutions to their joint customers. In addition, BlueJeans will be able to leverage the R&D of both companies to enhance their offering to “high growth areas such as telemedicine, distance learning and field service work,” according to Verizon.

We are excited to combine the power of BlueJeans’ video platform with Verizon Business’ connectivity networks, platforms and solutions to meet our customers’ needs.” - Tami Erwin, CEO of Verizon Business

Company details (Verizon)

Verizon is an American telecommunications conglomerate which engages in provision of communications, information and entertainment services. The company operates through the Verizon Consumer Group, which provides consumer-focused wireless communications services and Verizon Business Group which offers video and data services as well as networking and security solutions.

  • Founded in 1983, headquartered in New York City, New York, United States

  • CEO: Hans Vestberg

  • Number of employees: 135,500

  • Market Cap: $253.94B (as of 12/31/2019)

  • EV: $381.69B

  • LTM Revenue: $131.35B

  • LTM EBITDA: $46.99B

  • LTM EV/Revenue: 2.90x

  • LTM EV/EBITDA: 8.12x


Company details (BlueJeans)

BlueJeans Network is a cloud-based video conferen