Market Overview

Vonage to Acquire Vocalocity for $130M in Cash/Stock Deal

Vonage Holdings Corp. (NYSE: VG) has entered into a definitive agreement to acquire privately-held Vocalocity, Inc. ("Vocalocity"), an industry-leading Software as a Service (SaaS) provider of cloud-based communication services to Small and Medium Businesses ("SMBs").

Vonage will acquire Vocalocity for $130 million, including $105 million in cash and $25 million in Vonage common stock. The transaction is expected to be accretive to adjusted Earnings Per Share ("EPS")1 and on an EBITDA1 multiple basis in 2015.

Vocalocity is one of the fastest growing providers in the SMB hosted VoIP market. During the first half of 2013, Vocalocity had revenue of $28 million and growing, implying an annual run rate of greater than $56 million.  First half 2013 revenues were 39% higher than the same period in the prior year. Vocalocity was EBITDA1 and free cash flow1 positive during this period.  Vocalocity ended the second quarter with 21,000 customers.

The total SMB market for voice service in North America is $15 billion and 32 million lines.  Vocalocity has focused on

See full press release

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