Seeking Alpha

Vonage acquiring SMB-focused VoIP services firm, shares soar

  • Vonage (VG +18.4%) is acquiring Vocalocity, a provider of fairly inexpensive cloud-based VoIP services and value-added features for SMBs, for $130M ($105M in cash + $25M in stock). Investors are quite pleased with the news. (PR)
  • Vocalocity had 1H revenue of $28M (+39% Y/Y), and was free cash flow positive during the period. The company focuses on companies with less than 20 employees, and had 21K customers at the end of Q2.
  • The market for hosted/cloud-based business telecom services market has been growing quickly (hence the enthusiasm for RingCentral's recent IPO), and generally features higher margins than the consumer VoIP market Vonage remains dependent on.
  • The deal is expected to close in Q4, and Vonage eventually expects annual synergies in "the high single-digit million dollar range." Vonage is paying for the cash portion of the deal using $30M in existing cash and $75M drawn from a credit facility.
From other sites
Comments (0)
Be the first to comment
DJIA (DIA) S&P 500 (SPY)
ETF Hub
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs