The acquisition combines Vonage‘s robust /unified-communications/ucaas and /unified-communications/cpaas solutions with NewVoiceMedia’s pure-play cloud contact center offerings, providing an end-to-end communication experience for a company’s employees and customers.
“We are thrilled to announce the acquisition of NewVoiceMedia, which represents a major step forward in the realisation of our strategic vision to deliver a differentiated, fully-programmable communications solution that drives more meaningful customer interactions and better outcomes for businesses,” said Vonage CEO Alan Masarek.
“This acquisition accelerates Vonage’s growth strategy and leadership position in cloud communications, strengthens our presence with global mid-market and enterprise clients, and deepens our integrations and key go-to-market relationships with CRM providers, especially Salesforce.com.”
NewVoiceMedia Provides Scale in High-Growth, Cloud Contact Center Market
NewVoiceMedia is the largest privately-owned, pure-play, cloud contact center company globally, and is a recognised leader in the space. NewVoiceMedia is in the Leader’s quadrant of the Gartner CCaaS Magic Quadrant for Western Europe, and was included for the third consecutive year on the Forbes Magazine Cloud 100, a list of the top 100 private cloud companies in revenue, sales growth, valuation and culture.
Over 700 primarily mid-market and enterprise customers rely on NewVoiceMedia for a range of customer engagement use cases, from inbound customer support to outbound sales, including worldwide brands like Adobe, Siemens, Time Inc., FundingCircle, and Rapid7.
Dennis Fois, CEO of NewVoiceMedia, commented, “Vonage and NewVoiceMedia share a powerful vision to serve businesses with cloud communications that connect employees and enable personalised conversations with their customers and prospects.
“Together, we can help businesses create richer experiences through a state-of-the-art, global, programmable cloud communication platform.”
NewVoiceMedia will continue to be led by Mr. Fois, who has more than 25 years of experience in international leadership, strategy, sales and marketing in the technology and financial services markets. Upon closing, the senior leadership team and its more than 400 employees, comprised of talented business leaders, skilled technologists, and a strong sales organisation, will join Vonage. Together, they will create an expanded customer experience centre of excellence.
Vonage Addressing a Large and Growing Total Addressable Market
Together, Vonage and NewVoiceMedia will be addressing a total addressable market that is expected to grow 60% over the next four years to approximately $80 billion, according to IDC. Within this, contact center is a $9 billion market today, and with NewVoiceMedia, Vonage will be well-positioned to capture a healthy share of this opportunity with a recognised leader in the space.
“Vonage is acquiring a high-growth software company that brings a cloud-native contact center solution that can be integrated with Vonage’s existing assets to create an expanded enterprise communications software suite and, as importantly, 400+ customer experience (CX) professionals, deployed globally,” observes Sheila McGee-Smith, President & Principal Analyst, McGee-Smith Analytics, LLC.
“NewVoiceMedia is particularly well-positioned to address larger-scale deployments due to its global scale and strong partnership with Salesforce.com.”
“Additionally, the NewVoiceMedia team will be a big part of jump-starting Vonage’s attack on the huge CCaaS market opportunity.”
Transaction Overview
Under the agreement, NewVoiceMedia shareholders will receive equity consideration of $350 million. Vonage is financing the acquisition through a combination of existing revolver capacity, cash on hand and cash on the balance sheet of NewVoiceMedia. Pro forma for the transaction, Net Debt to LTM Adjusted OIBDA will be approximately 3.3x and is expected to be below 3.0x within two quarters.
The enterprise value paid for NewVoiceMedia represents approximately 3.8x projected 2019 revenue. The Company expects to realise annual run rate synergies of approximately $10 million by year-end 2019 and meaningfully higher by year-end 2020, which include revenue synergies from cross-selling and cost synergies from cost of service and G&A savings.
The transaction is expected to close in the fourth quarter of 2018 and is subject to standard regulatory review and customary closing conditions. The Company plans to update financial guidance, taking into account the acquisition, in its third-quarter earnings release.
J.P. Morgan Securities LLC served as sole financial advisor to Vonage and provided a fairness opinion to the Board of Directors. Morrison & Foerster LLP served as legal counsel to Vonage. Jefferies LLC served as sole financial advisor and Weil, Gotshal & Manges LLP served as legal counsel to NewVoiceMedia.
About Vonage
Vonage (NYSE: VG) is redefining business communications. True to our roots as a technology disruptor, we’ve embraced technology to transform how companies communicate to create better business outcomes. Our unique cloud communications platform brings together a robust unified communications solution with the agility of embedded, contextual communications APIs. This powerful combination enables businesses to collaborate more productively and engage their customers more effectively across messaging, chat, social media, video and voice.
About NewVoiceMedia
NewVoiceMedia is a leading global provider of cloud contact center technology that enables businesses to create exceptional, emotive customer experiences to serve better and sell more.
Its award-winning platform joins up all communications channels without expensive, disruptive hardware changes and plugs straight into your CRM for full access to hard-won data. With a true cloud environment and proven 99.999% platform availability, NewVoiceMedia ensures complete flexibility, scalability and reliability.
