Vonage Holdings has announced plans to acquire privately-held Telesphere Networks, a provider of unified communications-as-a-service (UCaaS), for $114 million in cash and stock.
Telesphere offers a suite of cloud voice and UCaaS services aimed at larger enterprises in the small and medium business (SMB) sector with regionally distributed offices, including call center solutions, collaboration, mobile office and HD multi-point video conferencing. Telesphere has provided cloud communications since 2006 and has built a national, cloud platform that is especially well suited to address the needs of larger SMBs .
“A year after Vonage moved into the rapidly growing UCaaS market, we are substantially expanding our presence within the sector through the Telesphere acquisition. This is an important next step in the continued execution of the Company’s long-term growth strategy,” said Marc Lefar, CEO of Vonage. “As we have demonstrated, the use of Vonage’s scale, brand, balance sheet and cash generation to invest in the acquisition of growth businesses has been very successful. Vonage Business Solutions’ annual revenue growth has accelerated from 38% to 52% in a year, and we are confident in our ability to accelerate growth at Telesphere as we bring it under the Vonage umbrella.”
With the addition of Telesphere, Vonage will boost its cloud-based proposition for enterprises. Telesphere’s average seat size per customer is more than 40, and average monthly recurring revenue per customer is nearly $3,000. Telesphere’s 2014 revenues are expected to be approximately $40 million, with more than $50 million of revenue already under contract for 2015.
Vonage will pay a multiple that is two times or less estimated 2015 revenues.
“Vonage already has a strong leadership position in hosted cloud communications and SaaS solutions through Vonage Business Solutions. Our two businesses complement each other well and will fortify Vonage’s scale in the high growth market for unified communications,” said Clark Peterson, CEO of Telesphere. “As UCaaS continues to evolve and adoption grows among businesses of all sizes, Vonage and Telesphere will be at the forefront of this growth. I am very excited about our future together.”
Peterson will join Vonage as president of “Telesphere, a Vonage company,” upon closing.
Alan Masarek, who will become the CCEO of Vonage this week, added, “Through the acquisition of Telesphere, Vonage is well positioned to provide an expanding range of unified communications services beyond those offered today, and to further penetrate the large and rapidly growing UCaaS market. We welcome the Telesphere team to the Vonage family and look forward to working together on our mission to become the premier provider of communications services for consumers and businesses.”
