LeadDesk is a leader in European cloud-based contact center software and is currently investing heavily in developing AI features. The company strengthens its telecom operator business (CPaaS) by acquiring the entire share capital of Länsilinkki Oy.
The acquisition will enhance LeadDesk’s competitiveness and service offering in the telecom operator business. At the same time, LeadDesk’s product development will benefit from Länsilinkki’s deep expertise in demanding technical platform development.
“Last year, the telecom operator business accounted for 22% of our total revenue. I am delighted that we can strengthen our competitiveness and expertise in a business that is important to us. We can offer better quality to our customers as we now control the entire supply chain. VoIP calling is still a significant part of contact center operations. An estimated 80% of contact center work is voice calls. Overall, the deal will take our telecom operator business to a whole new level,” says Olli Nokso-Koivisto, CEO of LeadDesk.
Länsilinkki Oy, a member of the Lounea Group, is a Finnish telecommunications operator established in 1991. The company was initially founded to manage the telecommunications operations of local telephone companies and has a strong position in the Finnish operator market. Länsilinkki has a long experience in the telecom operator business, and its customers consist mainly of other operators. The company’s revenue in 2022 was EUR 1.3 million, and EBITDA was EUR -255 thousand. Länsilinkki employs approximately 15 people. LeadDesk will acquire the entire share capital of the company. Länsilinkki will continue to serve its existing customers as a separate company.
Significant synergies for LeadDesk
“Länsilinkki has had challenges in renewing its business. However, there are clear synergies in the acquisition. We have a clear plan to increase EBITDA to a significantly positive level already next year. We have been one of Länsilinkki’s biggest customers, so we know the company well. LeadDesk has extensive experience in successful acquisitions and subsequent integrations. We can offer Länsilinkki’s employees and customers a good new home,” Nokso-Koivisto continues.
”Länsilinkki used to play a significant role in the business of telephone companies. Our industry has undergone substantial changes since the transition from landline to mobile telephony. Länsilinkki’s owners have also been at the centre of change, and our current business relies primarily on fiber networks. While Länsilinkki is a good company, its ownership no longer aligns with our strategy. As a major customer of Länsilinkki, LeadDesk is undoubtedly an excellent home for the company. We believe Länsilinkki’s strong professionalism and expertise will be a natural fit for LeadDesk’s growth story.” says Veli-Matti Viitanen, CEO of Lounea.
Improving competitiveness in a strategically important business
The role of the voice channel in successful customer service and sales is significant now and in the future. In many industries, consumers prefer to deal with businesses over the phone, and the number of calls is expected to grow. * Success in this business requires cost-effectiveness and a wide range of services. Thanks to its operator license, Länsilinkki has, among other things, its own phone numbering space. These factors are expected to improve LeadDesk’s cost-efficiency and quality.
“The acquisition makes us one of the largest telecom operators in Finland. Our size is significant even on a Nordic scale. Länsilinkki directs 180 million minutes of calls per year. Together we will direct more than 430 million minutes of calls per year.” says Nokso-Koivisto. “As an operator, we will benefit from economies of scale and, in the medium term, we will be able to take our lessons to other countries.”
The backbone of LeadDesk’s CPaaS business is its own CPaaS platform. LeadDesk’s cloud-based customer service and sales solutions rely on the platform. The platform handles the technical transmission of voice and messaging, among other things. As a result, LeadDesk’s or LeadDesk’s customers’ application developers that use the platform do not have to code their own communications solutions. Application developers can focus on building applications that deliver the best user experience. Länsilinkki’s technical expertise in telecommunications supports the development and maintenance of the LeadDesk platform.
“Although the acquisition will not significantly impact our turnover and profitability, we will gain a lot of valuable technical expertise. Länsilinkki’s technical experts will fit in well with our CPaaS platform development team.” Nokso-Koivisto sums up.
Key benefits of the acquisition
- LeadDesk’s telecom operator service offering grows, and quality improves
- LeadDesk’s competitiveness and cost-efficiency in the telecom operator business will increase significantly.
- LeadDesk will gain valuable technical expertise and technology for developing the CPaaS platform.
The acquisition has been signed and closed today, 30 June 2023. The cash and debt free purchase price of the acquisition is EUR 500 thousand. In addition, a commitment has been made to pay a maximum of EUR 250 thousand as a possible earnout if certain conditions are met. The purchase price will be paid in cash. The sellers are Lounea Oy, Vakka-Suomen Puhelin Oy, Kaisanet Oy, Pargas Telefon Ab, Kemiön Puhelin, LPONet Osk Anl and Karis Telefon Ab. LeadDesk will raise a loan of ca. EUR 1 million to finance the purchase price and working capital. The company will apply for a floating charge of EUR 1.2 million for the loan. Länsilinkki will be reported as part of the LeadDesk group from 1 July 2023.
LeadDesk is a fast-growing and internationalising software company, operating in the cloud-based software market in Europe. The company offers the LeadDesk cloud service for sales and customer service and has grown to a leading cloud service vendor in sales and customer service in the Nordics. In 2022, the company’s revenue was €28.1 million. The international revenue share was approximately 58%. LeadDesk’s shares are traded in the Nasdaq First North Finland market under the ticker LEADD. The company has offices in seven European countries. The LeadDesk cloud service is used by ca. 1900 customers around the world.