Unified Communications Featured Article

Vonage's Agreement to Acquire SimpleSignal Enhances Its UCaaS Business

March 19, 2015

We have all seen the Vonage commercials on TV. Vonage is a commercial Voice over IP (VoIP) network and SIP company that provides telephone service via a broadband connection. The company's name is a play on their motto "Voice-Over-Net-AGE." This week, Vonage announced that it has entered into a definitive agreement to acquire privately-held Simple Signal Inc.

SimpleSignal offers cloud-based telecommunications systems for businesses, including integration of voice communications into software applications, and is a leading provider of Unified Communications-as-a-Service (UCaaS) and collaboration solutions for small and medium businesses (SMBs).

BroadSoft is a global communication software and service provider. The company’s flagship product, BroadWorks, is a VoIP applications platform that enables service providers to deliver basic and enhanced voice services for business and residential end users. It is also the platform that both Vonage and SimpleSignal use as their VoIP component. With a complementary technology platform, you can see that compatibility will not be an issue.

“The acquisition of SimpleSignal deepens Vonage’s penetration in UCaaS and demonstrates our commitment to execute on our organic and inorganic growth strategy in the sector. SimpleSignal is a natural complement to Vonage’s rapidly expanding UCaaS business. It has a proven track record of providing feature-rich solutions required by larger SMBs, strong channel and strategic partnerships, and a common underlying technology platform. This acquisition further positions Vonage as a clear leader in Unified Communications,” said Alan Masarek, Vonage’s CEO.

The acquisition will give Vonage more than just additional UCaaS features and services. SimpleSignal has a very strong nationwide network of indirect channel partners. This will give Vonage the ability to access new channel partnerships, as well as more diverse geographies, which could make Vonage one of the largest organizations in the UCaaS sector.

Generally, when one company acquires another, there is a period of time required to either assimilate the applications or create a subsidiary. Due to the fact that both of these companies have complimentary platforms, Vonage believes that achieving synergy from network operations, general and administrative and the use of technology for serving customers will be a quick and simple process.

A breakdown of the financial terms shows that Vonage will be paying SimpleSignal $20 million in cash. In addition, 1.1 million shares of Vonage common stock will be made available, which represents another $5 million. The total figure comes in at $25.25 million.

Edited by Dominick Sorrentino

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