**Editor’s Note: Please click here for a recap of the biggest channel-impacting mergers in Q2 2015.**
With Thursday’s announcement of the acquisition of iCore, Vonage has now made its fourth UCaaS-related purchase in two years. It’s aimed at accelerating Vonage’s upmarket advance in hosted PBX, CRM integration, disaster recovery, conferencing and contact-center services.
The move grows Vonage’s customer base and its sales team. According to Vonage CEO Alan Masarek, iCore has the largest sales force in the UCaaS market. The move follows the company’s 2013’s purchase of Vocalocity – the hosted service provider renamed Vonage Business Services – and the 2014 acquisition of Telesphere, which in addition to hosted voice and UCaaS added a national MPLS core and SLAs to show bigger business customers its serious intentions. In April 2015, Vonage added Simple Signal, a UCaaS provider more active among SMBs.
At the time of purchase, business accounts make up one-quarter of Vonage’s revenue. iCore supports more than 85,000 seats with a monthly average revenue per user (ARPU) of more than $4,000. It derives more than 60 percent of its revenue from the over-100-seat segment. Monthly revenue churn is less than 1 percent as a result of three-year contracts that include quality-of-service guarantees. As of the end of the first quarter, its business-services revenue has grown 49 percent and its stock value 85 percent, according to GigaOm.
iCore runs its unified-communications applications on the same BroadSoft BroadWorks platform used by Vonage, which should make integration easy. It also has a subset of customers running on BroadSoft’s M6. Their Microsoft Lync-as-a-Service solution shows a good grasp of market direction, as does a full range of complementary cloud services, such as Infrastructure as a Service (IaaS), virtual desktop, and hosted Microsoft Exchange.
Shareholders of iCore will receive $92 million in cash per terms of the merger, subject to customary closing adjustments. The transaction is expected to close sometime in the third quarter.
CEO Masarek addressed the issue of multi-channel strategy in the acquisition announcement.
“With the addition of iCore, Vonage will have what we believe is the largest sales force in the UCaaS market, addressing midmarket and enterprise companies through a field sales organization that sells directly to customers and a channel sales organization that supports our extensive nationwide network of indirect channel partners. Vonage serves the SMB market through a highly successful inside sales team augmented with online sales. Combined with iCore, we believe we will have the broadest multi-channel distribution platform in our industry and are ideally positioned to serve the full spectrum of the UCaaS market, from SMB to midmarket to enterprise.”
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June 19 2019 @ 15:37:42 UTC