Vonage Q3 Profit Tops Estimate; To Acquire Telesphere Networks

(RTTNews) - Vonage Holdings Corp. (VG) reported net income for the third quarter of $5 million or $0.02 per share, compared to $4 million or $0.02 per share for the year ago quarter.

Excluding items, adjusted net income for the third quarter was $14 million or $0.06 per share, compared to $9 million or $0.04 per share in the prior year quarter.

Revenue for the third quarter rose to $214.74 million from $203.98 million a year ago.

Analysts polled by Thomosn Reuters expected the company to earn $0.04 per share on revenue of $216.59 million for the third quarter. Analysts' estimates typically exclude special items.

Separately, Vonage said it has agreed to buy privately-held Telesphere Networks Ltd., a provider of Unified Communications-as-a-Service solutions to larger enterprises in the small and medium business sector, for $114 million in cash and stock.

Telesphere's 2014 revenues are expected to be approximately $40 million, with more than $50 million of revenue already under contract for 2015. Vonage will pay a multiple that is two times or less estimated 2015 revenues.

Under the deal, Telesphere shareholders will receive total consideration of $114 million comprised of about $91 million in cash and about 6.86 million shares in Vonage common stock representing $23 million, subject to customary closing adjustments and indemnity escrow arrangements. Cash consideration will be financed through available cash and Vonage's existing $125 million credit facility.

The deal is expected to close in 2014.