Vonage to acquire Vocalocity for $130M

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Holmdel-based digital communications company Vonage announced today it has entered into a definitive agreement to acquire privately-held Vocalocity Inc. for $130 million.

According to the announcement, the price will include $105 million in cash and $25 million in Vonage common stock. During the first half of 2013, Vocalocity, a software as a service provider of cloud-based communication services to small and medium businesses, had revenue of $28 million and growing, implying an annual run rate of greater than $56 million. First half 2013 revenues were 39% higher than the same period in the prior year. Vocalocity ended the second quarter with 21,000 customers.

The total SMB market for voice service in North America is $15 billion and 32 million lines, Vonage said in a statement. Vocalocity has focused on companies with 20 or fewer employees, which represents more than 60 percent of the total market, with 85 percent of SMBs still purchase voice service from traditional carriers at rates that are frequently 40-50 percent higher than those of Vocalocity, according to the press release.

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