Momentum Telecom has reached an agreement to acquire unified communications-as-a-service (UCaaS) provider Alteva for $28.7 million.

Alteva’s board of directors has unanimously approved the agreement, which is expected to close in the fourth quarter of 2015.

“Our board of directors concluded that combining with Momentum Telecom represents the best opportunity to realize immediate, substantial value for our shareholders,” Alteva CEO Brian J. Kelley said in a prepared statement. “It has become exceedingly clear that profitability in the Voice-over-Internet Protocol (VoIP) space requires significant scale to achieve maximum efficiency. … Momentum Telecom and Alteva together constitute the most viable solution toward achieving these goals and benefiting our employees, customers and partners.”

In addition, Momentum Telecom noted that the Alteva addition increases its total number of users to over 250,000 and will allow the company to expand its presence.

“With the merger, customers will continue to experience the high-quality products, service and support that they count on from Alteva and Momentum  (Telecom) today,” Momentum Telecom CEO Bill Fox added.

The Alteva acquisition also could help Momentum Telecom extend its UCaaS market reach.

MarketsandMarkets has predicted that the UCaaS market will grow from $13.1 billion in 2014 to more than $23.3 billion in 2019, which would represent a 12.2 percent compound annual growth rate (CAGR).

The research firm also pointed out that UCaaS is expected to be one of the key factors that will drive the UC market’s overall growth.

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