Benzinga | Nov 4, 2020 04:22PM EST

Communications Systems, Inc. Acquires IVDesk's Operating Assets For $950K In Cash At Closing With Up To An Additional $550K Cash Payment Contingent On An Earn-out Tied To Customer Retention

Communications Systems, Inc. (NASDAQ:JCS) ("CSI" or the "Company"), an IoT intelligent edge products and services company, today announced that its JDL Technologies subsidiary has acquired the operating assets of privately held IVDesk. The transaction was structured as an asset purchase under which JDL paid $950,000 cash at closing with up to an additional $550,000 cash payment contingent on an earn-out tied to customer retention.

Based in Minnetonka, Minnesota, IVDesk provides time-tested, market-proven and easy-to-use private cloud services to small- and mid-size businesses (SMB), with a particular focus on the financial services industry. IVDesk currently services over 85 customers across the US with a focus on a tri-state region with Minnesota at the center. IVDesk's business model is built on monthly recurring revenue.

Roger Lacey, CEO of CSI noted, "IVDesk's Desktop-as-a-Service (DaaS) platform fits well with JDL Technologies' business operations in the Company's Services and Support segment, bringing significant resources and experience in cloud-delivered applications and vertical specialization. The acquisition of the IVDesk assets, combined with CSI's May 2020 acquisition of Ecessa and its recent minority investment in Quortus, a UK-based company that creates agile and feature-rich private wireless networks, has substantially increased the depth and quality of our services. CSI is now able to provide its clients with a wider range of innovative solutions that address their increased security sensitivities, a cloud migration path and the ability to establish the more robust and always-available network that a modern workforce requires."

Mr. Lacey added, "As we continue to expand our businesses through attractive acquisitions and partnerships, we have entered a new phase for CSI and are diligently working on launching a Company-wide re-branding strategy."

Scott Fluegge, General Manager of JDL, noted, "IVDesk has been providing a fully redundant and highly available private cloud platform to its SMB clients who often face different IT challenges due to limited internal IT resources and are struggling to keep up with constantly increasing security needs that are now common to all industries. IVDesk provides easy-to-integrate and cost-effective solutions that are designed to solve these challenges. IVDesk shares JDL's high-touch customer-centric values, which clients demand from an always-on and ever-advancing cloud solution."