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Communications Services Provider Vonage Holdings Corporation to Buy SaaS Provider Vocalocity, Inc.

October 14, 2013
by Staff Writer

Communications services provider Vonage Holdings Corporation is to buy SaaS provider Vocalocity, Inc., a hosted VoIP provider that caters to the Small- to Medium-sized Business (SMB) sector. The company, whose services enable people to connect using cloud-connected devices, will pay $130 million for Vocalocity. This amount includes a cash payment of $105 million and common stock to a value of $25 million.

Vocalocity has seen significant growth over recent periods and generates an annual run rate of around $56 million. The company saw a 39% increase in revenues in the first half 2013 over the same period last year. It has around 21,000 customers.

The North America SMB voice market generates around $15 billion. 85% of SMBs acquire services from "traditional" carriers whose costs are generally 40-50% higher than Vocalocity's. Vocalocity focuses on companies with fewer than 20 members of staff, and as this represents 60% of the market, it can expect to enjoy long-term growth opportunities.

“As business VoIP moves from the early adopter phase to the mainstream, a Vocalocity and Vonage combination delivers the scale, quality and feature set to best serve customers and create phenomenal opportunities for growth," explained Wain Kellum, CEO at Vocalocity. "I am impressed with what Vonage has built, and look forward to joining the team."

Do you know of any other companies involved in acquisitions? Let us know the details. Add your comments below.

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