NEW YORK (The Deal) -- Online phone company Vonage Holdings (VG - Get Report) on Friday agreed to buy unified messaging specialist iCore Networks to expand its business communications business and win a larger sales force.
Vonage, of Holmdel, N.J., said it would pay $92 million for iCore, which was founded by current CEO and investor Stephen Canton in 2004 with a $7 million personal investment.
Vonage decided to begin offering unified communications last year and quickly went on a hunt for acquisitions --unified messaging offers a single platform for users to connect via voice or text using a variety of technologies such as email, instant messenger and phone service through the Internet.
The company in November announced a $114 million acquisition of Tuscon-based iCore rival Telesphere Networks, which was backed by Rally Capital, Hawkeye Investments and Harvest Partners. In April it closed a $40.25 million agreement for Dana Point, Calif.-based SimpleSignal that included $25.25 in Vonage shares and $20 million in cash.
Customers also like unified communications as a service (UCaaS) from companies such as iCore, Teleshere and SimpleSignal because it allows them to jettison expensive phone systems in favor of online solutions. The software is maintained by the providers and is available via the Internet around the world.
"iCore is an excellent strategic fit and a natural complement to Vonage's rapidly expanding UCaaS business. This acquisition will deepen our penetration at the higher end of the business market and further strengthen our industry leadership," said Vonage CEO Alan Masarek in a statement.
Vonage didn't release earnings information for iCore but said the purchase price represents 1.3 times its annual revenue. The target provides services to 85,000 customers, 60% of which pay for services for more than 100 employees, Vonage said. The services generate $4,000 in revenue per year per user.
In addition to unified communications, iCore also provides the usual array of cloud services that allow companies to store data and information on remote computers and access it as well as software nearly anywhere.
Vonage said it would pay for the deal with existing cash and expected to save $5 million by eliminating overlapping operations following the deal, which is set to close by Sept. 30. iCore, Telesphere and SimpleSignal all rely on similar technology, simplifying the merger, according to Vonage.