US VoIP business Vonage (NYSE:VG) has agreed its fourth acquisition in nine months, this time inking a deal to buy smaller rival iCore Networks for US$92m in cash.
The purchase price represents about 1.3x iCore’s estimated 2015 revenues. The transaction is expected to close by the end of Q3 2015, subject to customary closing conditions and regulatory approvals, Vonage said.
Vonage was advised by Pacific Crest Securities, a division of KeyBanc Capital Markets, and Weil, Gotshal & Manges.
iCore was advised by Wells Fargo Securities, and Foley & Lardner.
Vonage said it would finance the transaction through cash from its balance sheet and from its revolving credit facility, resulting in pro forma net debt to adjusted LTM EBITDA of approximately 1.5x as of 30 June.
The buyer said it expected to achieve annual recurring cost synergies of more than US$5m in 2016, thanks to similarities between the two companies, such as sharing the same call processing platform.
Describing Virginia-based iCore as “an excellent strategic fit,” Vonage CEO Alan Masarek said the acquisition would boost Vonage’s penetration “at the higher end” of the mid-market and enterprise business market by combining hosted communications with cloud services.”
iCore claims to serve 85,000 customer stations, with monthly ARPU per customer of over US$4,000 with very low churn. It provides voice, video, mobile and collaboration services, as well as infrastructure as a service (IaaS), virtual desktop, and hosted Microsoft Exchange.
Vonage said that following the acquisition, it expects total 2015 GAAP revenue of between US$885m and US$892m, with an adjusted EBITDA of at least US$135m and capex of some US$30m.
This is the listed company’s fourth acquisitions in nine months. The last three were gUnify (automation and workflow software) for an undisclosed price, SimpleSignal (communication software) for US$25.25m, and Telesphere (telecommunication service provider) for US$114.6m, according to Pitchbook.