Vonage Holdings Corp., the creator of the Vonage Mobile app has entered into a definitive agreement to acquire privately-held iCore Networks, Inc., a provider of Unified Communications-as-a-Service (UCaaS) for businesses, for $92 million.
iCore offers a broad range of voice, video, mobile and collaboration services to address the evolving needs of businesses, and sells its solutions primarily through its large, direct field sales force. It leverages the same BroadSoft BroadWorks M6 call processing platform used by Vonage, resulting in ease of integration for iCore’s customers. iCore also offers a comprehensive Microsoft Lync-as-a-Service solution. iCore also offers complementary cloud services, such as Infrastructure as a Service (IaaS), virtual desktop, and hosted Microsoft Exchange.
lan Masarek, Vonage Chief Executive Officer calls iCore an “excellent strategic fit and a natural complement to Vonage’s rapidly expanding UCaaS business,” saying the acquisition will help “deepen our penetration at the higher end of the business market.”
The company is looking to serve business of all sizes by way of a “multi-channel distribution approach.” The executive also added that the addition of iCore puts Vonage in a position to have what it believes is the “largest sales force in the UCaaS market” and it will be addressing multiple markets with this new benefit.
iCore sells its solutions primarily through its large, direct field sales force, adding “significant scale and a national footprint” to Vonage’s existing sales force. iCore supports more than 85,000 customer seats, with monthly ARPU per customer of more than $4,000, and derives more than 60% of its revenue from customers with 100 or more seats. Monthly revenue churn is less than one percent as a result of three-year contracts that include Quality of Service (“QoS”) guarantees.
The merger agreement, which has been approved by the board of directors and is expected to close by the end of Q3 2015 pending customary closing conditions and regulatory approvals, will provide shareholders of iCore with $92 million in cash, subject to customary closing adjustments, a price that is 1.3 times the estimated 2015 iCore revenues. A portion of the purchase price will be deposited into escrow to “secure certain indemnification rights under the merger agreement.”