Cloud5 and Single Digits call off the hotel connectivity deal they signed this year

Cloud5 has confirmed it will not buy Single Digits' hospitality business, several months after signing a letter of intent to do exactly that. If your hotels get internet, guest WiFi or voice service from either company, the supplier you deal with next year is the same one you deal with now.

Cloud5 published the statement on 9 October, signed by Mark Holzberg. It says the company executed a letter of intent earlier this year to acquire Single Digits' hospitality business, and that both teams then worked towards closing for several months. That work has stopped. "Unfortunately, the parties will not be proceeding forward with the transaction," the statement reads, adding: "We cannot comment further on the confidential details of the negotiations."

The statement thanks customers and partners for their support during the process and says Cloud5 will keep serving customers and investing in its technology, services and people.

What is not in the statement

Quite a lot. No purchase price was ever disclosed, and none is now. No reason is given for the deal failing. Nothing indicates which side stepped back, or whether it was price, financing, diligence or something else. Cloud5 describes itself as disappointed by the outcome and leaves it there.

The scope is worth noting precisely, because it is narrow. The deal covered Single Digits' hospitality business, not Single Digits as a whole. Single Digits also serves other property types, and that part of the company was never part of the transaction.

Both firms sit in the same layer of the hotel stack. Cloud5 sells managed services, internet including managed WiFi and SD-WAN, voice including hosted and on-premise PBX, SIP trunking and E911, in-room entertainment and a contact centre, to hotels and to multi-dwelling units. Single Digits' hospitality arm covers much the same ground: managed networks and guest internet for hotels. Put together, the two would have been a considerably larger single supplier in a part of the market where most hotels still buy locally.

What it means for operators

In the immediate sense, nothing changes. Two suppliers that spent months preparing to become one are now back to competing, and neither has said anything about service levels, contract terms or product roadmaps shifting as a result.

The one thing worth checking is what you were told while the deal was live. Anyone who signed or renewed with either company in the last few months was quite possibly sold on the combined business: a wider footprint, a merged support organisation, a single roadmap. Those assumptions are now void. If any of it ended up in a contract or a written commitment, ask for it to be restated against the company that actually exists. If it did not, there is nothing to do.

This also lands in the middle of a busy year for hospitality technology deals. Duetto bought FLYR's hospitality business, Dormakaba bought Alliants, and Constellation's Juniper Group bought Bookassist, all within the last few weeks. Connectivity is one of the few layers where buyers still face a fragmented supplier base, which is part of what makes it attractive. It is also a layer with long contracts, hardware on site and real switching costs, which is part of what makes deals there hard to finish. This one did not finish.