New Jersey-based Vonage Holdings Corp., a major provider of cloud communications services, has agreed to acquire privately-held iCore Networks, Inc. for $92 million.
McLean-based iCore is a provider of unified communications-as-a-service (UCaaS) for businesses.
“This acquisition will deepen our penetration at the higher end of the business market and further strengthen our industry leadership,” Alan Masarek, Vonage CEO said in a statement. “iCore has a proven track record of delivering the innovative UCaaS solutions required by mid- market and enterprise companies, and has been particularly successful combining hosted communications with complementary cloud services to create a robust unified communications experience.”
The Virginia company sells its solutions primarily through its large, direct field sales force. It supports more than 85,000 customer seats, and derives more than 60 percent of its revenue from customers with 100 or more seats.
Vonnage said iCore offers a broad range of voice, video, mobile and collaboration services to address the evolving needs of businesses.
Under the terms of the merger agreement, which has been unanimously approved by the boards of directors of Vonage and iCore, shareholders of iCore will receive $92 million in cash, subject to customary closing adjustments.
The purchase price represents approximately 1.3 times estimated 2015 iCore revenues. The transaction is expected to close by the end of the third quarter, subject to customary closing conditions and regulatory approvals.
Given the similarities of the businesses and their common technology, Vonage expects to achieve cost savings in network operations, technology used to service customers and various operating expenses. Annual recurring cost synergies are expected to exceed $5 million in 2016.
Vonage is updating its 2015 revenue guidance to include the impact of the iCore acquisition. Vonage expects total 2015 revenue to be in the range of $885 million to $892 million. This revenue guidance assumes that the transaction closes by Sept. 30 and excludes iCore’s deferred revenue due to purchase accounting rules.