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Vonage Acquires TokBox, the Leading Programmable Video Provider

HOLMDEL, N.J.(02 Aug 2018)

Vonage Holdings Corp. (NYSE: VG) ("the Company") has acquired TokBox Inc. ("TokBox"), a subsidiary of Telefonica, S.A. ("Telefonica") in an all-cash transaction for an enterprise value of $35 million, including assumed liabilities. San Francisco-based TokBox is the industry leader in WebRTC programmable video.

Accelerates Vonage's Platform Strategy

The acquisition of TokBox places Vonage in the leadership position in the programmable video sector with the strongest level of global adoption among video API providers. TokBox enables developers and enterprises to integrate live video into websites, mobile apps, and IoT devices with just a few lines of code.

The acquisition also meaningfully broadens the Vonage API Platform by adding video to its existing strength in voice, SMS and IP messaging.

"We are incredibly excited to announce the acquisition of TokBox, the global leader in programmable video APIs. With TokBox, our API portfolio expands beyond voice, SMS and IP messaging to include global leadership in programmable video. TokBox significantly expands our total addressable market, and it is a major step towards global leadership in cloud communications," said Vonage CEO Alan Masarek.

Mr. Masarek continued, "The addition of the TokBox team also brings a workforce of skilled technologists to help accelerate our pace of innovation. We are excited to welcome TokBox's team to our growing Vonage family."

Significantly Expands Vonage's Total Addressable Market

According to IDC, the U.S. programmable video market will be a $7.4 billion opportunity by 2022, representing more than a 140% four-year CAGR. This growth is being driven by three key factors:

- The adoption of WebRTC, which has emerged as the worldwide standard for high quality video communications

- The reduction in cost and complexity that programmable video provides developers to integrate live video

- The near ubiquity of video-capable devices, coupled with improvements in network infrastructure which minimize video latency

Mark Winther, VP Telecom Consulting for IDC, commented, "Already a strong provider in programmable SMS, voice and IP messaging, this strategic move by Vonage builds out its portfolio of cloud communications capabilities. TokBox extends Vonage's ability to gain share in the fast growing CPaaS market with a set of interactive video APIs and a customer base that proves the value of programmable video communications."

High Quality, Enterprise Level Video Communications

Founded in 2007, TokBox has the highest level of global adoption among programmable video providers using WebRTC.  TokBox has more than 2,300 global customers across a range of applications including: online education, financial institutions, help desks, telemedicine, field services, interactive broadcasts and social media. Today, over 1,700 mobile apps use the TokBox software development kit across Android and iOS.

With the addition of TokBox to the Vonage platform, developers will benefit from a simple, flexible and scalable programmable video solution to create engaging, embedded communications experiences.

Scott Lomond, CEO of TokBox, commented, "TokBox established itself early on as an industry leader based on the belief that the WebRTC standard had significant potential to drive a wave of innovation and value creation. As WebRTC has gained traction, our growth has been supported by the ability of our platform to simplify the integration of live video into websites and mobile apps for developers."

Transaction Overview

Vonage is financing the acquisition through existing revolver capacity. Pro-forma for the transaction, net debt to OIBDA was approximately 1.1 times.

David Pearson, CFO of Vonage, commented, "Acquisitions continue to be a core part of our strategy to expand our total addressable market and accelerate our pace of product innovation, while providing new solutions to our customers to drive better business outcomes."

Perella Weinberg Partners L.P. served as sole financial advisor and Morrison & Foerster LLP served as legal counsel to Vonage. LionTree Advisors, LLC served as sole financial advisor and Goodwin Procter LLP served as legal counsel to Telefonica.

Conference Call

Vonage will discuss further details of this transaction at 8:30 AM Eastern Time on August 1, 2018 during the Company's Second Quarter 2018 earnings call. To participate, please dial (866) 891-8177 approximately 10 minutes prior to the call. International callers should dial (412) 902-6756.

A live webcast of the conference call will be available on the Vonage Investor Relations website. A replay of the webcast will also be available shortly after the conclusion of the call and may be accessed through Vonage's Investor Relations website or by dialing (877) 344-7529 or (412) 317-0088, passcode 10122031.

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.

The Company also provides a robust suite of feature-rich residential communication solutions.

Vonage Holdings Corp. is headquartered in Holmdel, New Jersey, with offices throughout the United States, Europe, Asia and Israel. Vonage® is a registered trademark of Vonage Marketing LLC, owned by Vonage America Inc.

About TokBox

TokBox develops and operates the OpenTok Platform, making it fast and easy to add live video communications into online and mobile websites, apps and services. The scalable, customizable platform gives users the creative freedom to develop any video interaction, from one-to-one chats to large-scale broadcasts.

The first platform to incorporate support for WebRTC, OpenTok caters to enterprises, entrepreneurs and developers with powerful APIs and a global cloud infrastructure. OpenTok has been used to stream WebRTC live video in over 36,000 applications since 2013 for companies including InTouch Health, Kickstarter, Royal Bank of Scotland, and Chegg.