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PGi Acquires Modality Systems, the World’s Largest Dedicated Microsoft® Lync® Services and Software Firm

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PGi Acquires Modality Systems, the World’s Largest Dedicated Microsoft® Lync® Services and Software Firm

Written by Modality Newsroom on 5, February 2015

5 February 2015: PGi (NYSE: PGI), the world’s largest pure-play provider of collaboration software and services, today announced the acquisition of Modality Systems Limited, the world’s largest dedicated Microsoft® Lync® services and software firm. PGi funded the purchase through its credit facility.

“Modality Systems is one of the most well-respected Lync® practices globally, and we are excited to deliver their unique value and expertise to our customers,” said Boland T. Jones, PGi founder, chairman and CEO. “Together with Modality, PGi empowers enterprises with a single trusted partner to support them through every stage of the unified communications process—design, implementation, user adoption, support and development—with the goals of boosting end-user success, driving productivity and maximizing the return on their Lync® investments.”
“Since starting Modality in 2007, we have focused on helping organisations improve collaboration, productivity and business processes through the successful implementation of Microsoft® Lync®,” said James Rodd, Modality co-founder and CEO. “PGi shares our intense focus and dedication to customer success, and we are thrilled to join forces to help companies worldwide reach their business goals through the power of unified collaboration.”

With offices in London, Seattle and Sydney, Modality is home to 45 Lync® certified professionals, including six Lync® Most Valuable Professionals (MVPs) and three certified Lync® Masters; their collective expertise helped the practice earn the prestigious status of finalist for Communications Partner of the Year in the 2014 Microsoft® Partner of the Year awards. Modality has developed a suite of proprietary software applications and add-ons designed to extend the value of a Lync® environment, enhancing business processes across an organisation and facilitating increased productivity for users.

“Modality has established a strong record of unlocking the value of Lync for enterprises around the world,” said Giovanni Mezgec, General Manager of Lync® & Skype® Product Marketing at Microsoft®. “By coming together with PGi, another long-standing Microsoft® partner, Modality increases its global reach and scale and is positioned to better serve Lync customers everywhere.”
2015 Financial Outlook

The following statements are based on PGi’s current expectations. These statements contain forward-looking statements and company estimates and anticipated results, and actual results may differ materially. PGi assumes no duty to update any forward-looking statements made in this press release.

Modality Systems had 2014 revenue of approximately $11 million. PGi anticipates the acquisition will be neutral to non-GAAP diluted earnings per share in 2015.

Based on current business trends and current foreign currency exchange rates, and assuming no additional acquisitions, PGi anticipates that results in 2015 will be within the following ranges: non-GAAP revenues are projected to be in the range of $575-$585* million and non-GAAP diluted EPS from continuing operations are projected to be in the range of $0.89-$0.92*. These ranges include an estimated negative year-over-year impact from changes in foreign currency exchange rates of approximately $18 million and $0.04 to non-GAAP revenues and non-GAAP diluted EPS from continuing operations, respectively, which is greater than the projected negative impact included in the company’s 2015 financial outlook provided on January 22, 2015. PGi anticipates that sales of its SaaS-based products will increase over 50% in 2015 compared to 2014.

* Non-GAAP Financial Measures
The company’s non-GAAP revenues exclude the impact of purchase accounting adjustments related to deferred revenue, and non-GAAP diluted earnings per share (EPS) from continuing operations projections exclude equity-based compensation, amortization expenses, non-recurring tax adjustments and related interest, restructuring costs, excise and sales tax expense and related interest, asset impairments, net legal settlements and related expenses, acquisition-related costs and the impact of purchase accounting adjustments related to deferred revenue. Management uses these measures internally as a means of analyzing the company’s current and future financial performance and identifying trends in our financial condition and results of operations. We have provided this information to investors to assist in meaningful comparisons of past, present and future operating results and to assist in highlighting the results of ongoing core operations. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measure will be included in the company’s final 2014 fourth quarter and year-end earnings release.

Microsoft and Lync are either registered trademarks or trademarks of Microsoft Corporation in the United States and/or other countries.

Topics: Industry

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