Sonus Continues Stock Buyback Program with New Privately Negotiated Share Repurchase
TMCnet Contributing Writer
SIP-based communications company Sonus Networks (News - Alert) has released an update to its previously announced stock buyback program. Specifically, the company has agreed to repurchase around 3.1 million shares of common stock in a privately negotiated transaction with Empire Capital Management. In total, Sonus will pay approximately $11 million for the stock at the market closing price on Aug. 23, $3.50 per share.
Raymond P. Dolan, president and chief executive officer of Sonus, commented that this share repurchase is an excellent way to “reduce the concentration of one of our largest shareholders in an orderly fashion.”
Last week, Sonus made a similar announcement, in which it agreed to repurchase around 7.4 million shares from Galahad Securities Limited and its affiliated entities, again as part of a privately negotiated transaction. Sonus paid about $25 million for this stock, at $3.40 per share, the market closing price on Aug. 22.
Sonus announced back toward the end of July as part of its second quarter financial results that its Board of Directors had approved a stock buyback program of up to $100 million. This was spurred on by the company’s strong performance during the quarter —it pulled in $69.2 million in total revenue, with total SBC revenue growth up 52 percent over the previous year — as well as a positive outlook for the rest of the year.
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“As a result of our improved profitability and growth in cash from operations, the Board has authorized the repurchase up to $100 million worth of outstanding shares, as it represents an attractive investment opportunity and demonstrates our commitment to enhancing shareholder value,” said Dolan at the time of the earnings announcement.
The buyback program is being funded by Sonus’ working capital and can be suspended or discontinued at any time. As of June 28, the company has cash, cash equivalents and investments of $304 million.
Several members of the Sonus team, including the senior director of Microsoft (News - Alert) Alliance, the vice president and general manager of Comm Application Solutions, and the vice president of Enterprise for the Americas, will be participating in panel discussions at ITEXPO Las Vegas in Mandalay Bay Resort & Casino this week, Aug. 26-29. Sonus will also be on the exhibition floor all week at booth 412H.
Edited by Alisen Downey