Lifesize has filed for a voluntary Chapter 11 bankruptcy with the U.S. Bankruptcy Court for the Southern District of Texas.
Once it comes out the other side, Lifesize plans to pass its brand and assets onto Enghouse Systems.
Indeed, the vendor has entered into an Asset Purchase Agreement with Enghouse, which will see Lifesize, Kaptivo, ProScheduler, Serenova, and Telstrat change hands.
However, current customers should not expect any short-term disruption as Lifesize is also finalizing a deal to free up an extra $5MN in financing from its existing lender.
Also, the vendor has filed “First Day” motions with its bankruptcy.
Together, Lifesize suggests this additional financing and these papers will allow the vendor to maintain its operations and pay employees as usual.
Moreover, Marc Bilbao, Co-Chief Restructuring Officer of Lifesize, stated:
During the Chapter 11 process, Lifesize will remain focused on serving its global customer base of omnichannel contact centers and 4K video conferencing solutions.
While the news may come as a surprise, Lifesize is still primarily known for in-office video conferencing solutions, a market that tanked after the pandemic.
Recognizing this, Lifesize snapped up CCaaS provider Serenova in March 2020, attempting to evolve its core focus.
Nonetheless, the damage done to its business model proved beyond repair, and Lifesize has now fallen under the strain of its unstable financial structure.
Despite this, Michael Yoshimura, Co-Chief Restructuring Officer of Lifesize, still believes the vendor can have success under the Enghouse banner. He said:
We are optimistic about the future for the company and are confident Lifesize can continue to deliver value and certainty to its blue-chip customer base worldwide.
That blue-chip customer base helped Lifesize draw in pre-acquisition annual revenues of $150MN.
According to Nicolas de Kouchkovsky of CaCube Consulting, this additional income could propel Enghouse Interactive’s annual revenues over the $300M mark.
In addition, de Kouchkovsky wrote on LinkedIn:
It will enhance the Canadian company’s ability to capitalize on the transition of contact centers to the cloud.
Nevertheless, the agreement is not set in stone. Indeed, Lifesize has revealed it remains subject to better offers and – of course – court approval.
Whether these will come remains to be seen. Although, the result will lead to increased consolidation in the CX space, as many analysts have long predicted.
Hopefully, future consolidation will not involve the courts but follow more conventional M&A routes.
Yet, with NICE CEO Barak Eilam recently suggesting that many of its CCaaS rivals are struggling, fears may rise that more of these headlines may be on the horizon.