Telecom Ramblings: Vonage adds more “Tools to the Toolbox” and Potentially Further Distances itself from BroadSoft-Cisco

Vonage unveiled its largest acquisition to date, acquiring NewVoiceMedia for $350M in cash. NewVoiceMedia presents a dynamic new edge to Vonage’s already extensive CPaaS, UCaaS, and managed video offerings with its cloud-based contact center solutions and further extends Vonage’s client base with an additional 700+ mid-market and enterprise customers. The purchase price represents a 3.8x multiple on expected 2019 revenue, with projected synergies from G&A savings and cross-selling of $10M by year-end 2019, according to Vonage’s press release.

Vonage’s M&A strategy is based on its reported 2014 goal of becoming the clear frontrunner in cloud communications for business. This acquisition, including several others before it, highlights the Company’s attempt to diversify its offerings, adeptly using its cash to offer a full managed solution, including UCaaS, CPaaS, and now contact center, that is more comprehensive than any of its competitors.

The more interesting angle of the NewVoiceMedia acquisition is that it further distances Vonage from the BroadSoft-Cisco ecosystem. What will be interesting to watch is whether Vonage will cap its BroadSoft license purchases and/or migrate existing customers to Vonage Business.

Read the full Industry Viewpoint here.