Crexendo Inc. has announced it has entered into a definitive agreement under which it will acquire Allegiant Networks LLC. The proposed transaction will expand Crexendo's business and footprint, particularly in Kansas and Missouri.

Allegiant is a strong regional telecom and data services company offering unified communication as a service (UCaaS), telecom services, managed services and network services from its headquarters in Overland Park, Kansas. The proposed transaction is a natural continuation of Crexendo's M&A strategy that is focused on adding strong companies that are currently part of its ecosystem, that use the Crexendo platform and allow Crexendo to expand its reach and offerings.

"We believe Allegiant will be a strong addition to Crexendo's breadth of offerings, accelerating our growth strategy and expanding our national presence particularly in the Midwest," said Steven G. Mihaylo, CEO, Crexendo. "With the combined scale, we will bring to market a larger balance sheet and a greater set of customer benefits. Allegiant's comprehensive suite of services, anchored by its world-class data center, is a strong addition to the Crexendo portfolio. This transaction is expected to be highly accretive. The proposed transaction exemplifies Crexendo's strategy of entry into and consolidation into attractive growth markets, low risks and ease of execution that does not distract from our organic strategy.  We look forward to welcoming Allegiant's employees and customers to the Crexendo family."

"Allegiant and Crexendo have closely aligned cultures with shared business values that are focused on providing value and customer service," said Bryan Dancer, CEO, Allegiant. "Our shared passion of providing the best services and support is the major reason I wanted to join Crexendo. I know our customers, our employees and our technologies are in good hands and our combination will only improve the service that Allegiant's customers receive. This acquisition will join two customer-centric and service-oriented companies with a focus on getting business accomplished efficiently. We are thrilled to join the Crexendo family and together become a major presence in the industry."

Following the acquisition, Dancer will join Crexendo, serving as an executive vice president.

Crexendo will acquire 100% of the membership interests of Allegiant in exchange for cash, stock and a buyer's note. At the closing of the transaction, Crexendo will make a payment of $2 million in cash, issue 2,461,538 shares of common stock of Crexendo, which shall be Rule 144 restricted stock, and deliver a Note payable in favor of Bryan Dancer for the remaining $1.1 million of the purchase price, which shall be subject to offsets for breach of representations or other offsets as detailed in the Acquisition Agreement. Shares issued in the transaction shall be fully restricted for a period of six months from the date of issuance and subject to a lock-up thereafter. Pursuant to the lock-up agreement, after six months, 25% of the shares will be permitted to be sold, with an additional 25% permitted to be sold every six-month period thereafter. The Agreement further includes a "break up" fee, that is required to be paid if either party terminates the agreement prior to closing except for a breach of the Agreement or lack of regulatory approval.

Closing of the transaction is expected in the fourth quarter of 2022, following receipt of approvals from certain regulatory authorities.