Sangoma Acquires All Key Assets of VegaStream

MARKHAM, ONTARIO–(Marketwire – Aug. 22, 2011) – Sangoma Technologies Corporation (TSX VENTURE:STC), a leading provider of hardware and software components that enable or enhance IP Communications Systems for both voice and data, announced it has acquired the key assets of the VegaStream Group of Companies, a leading UK-based developer of VOIP gateway appliances.

The business operations of VegaStream will be quickly integrated into Sangoma’s, with VegaStream staff being welcomed as part of the respective Sangoma teams, the majority being in R&D and Sales and Marketing. The VegaStream products will become part of the Sangoma portfolio with customers rapidly benefiting from Sangoma’s reputation for efficient supply chain management and quick turnaround of customer orders.

Sangoma is investing in new marketing, sales and product development initiatives, and this transaction is further evidence of such investments to drive ongoing growth. The acquisition of VegaStream helps Sangoma to achieve several of its strategic objectives: broadening its portfolio, adding to its distribution network, delivering existing channel partners a more comprehensive set of products, affording Sangoma an EU office to enable better service to this critical part of the world in local time zones, expanding its customer base and customer segments (including more network operators), and penetrating more deeply into developing regions, including significant upside in the key market of India with some excellent large clients.

“VegaStream has some truly great products, people, customers and distributors”, said Bill Wignall, President and CEO of Sangoma. Wignall continued, “As the IP Communications market evolves, Sangoma is re-inventing itself in order to become a significant player in more segments within that market. This acquisition supports one of our key corporate messages, ‘We are not just a board company anymore’. For years, Sangoma has provided the industry’s leading portfolio of TDM to IP cards for use inside servers, and we will continue to dominate that space. However, external gateways which provide much of the same functionality but reside outside the server as their own appliance, are becoming increasingly popular, and we want to offer our customers both options. External gateways expand our addressable market, can be easily integrated into Virtualized and Cloud based solutions, and so we hope to capture additional opportunities in this space as well as in our traditional segment. We decided to accelerate our entry to this market segment, using a ‘buy versus build’ decision, adding the well-respected VegaStream products to our portfolio. I expect this transaction will create value for Sangoma shareholders and customers alike.” We plan to continue our growth by both organic means and a few more strategically selected acquisitions.

Alexis Argent, Sales Manager at VoIPon in the UK stated, “As a customer/partner of both Sangoma and VegaStream, we believe that this acquisition will allow us to meet even more of our customers’ demands with a more comprehensive portfolio from a much stronger partner in Sangoma. We look forward to being able to offer enterprise customers and network operators their choice of either internal cards or external gateways for their IP networking needs.”

This is an all cash purchase and no new shares are being issued by Sangoma as part of this transaction. The company paid £0.9M (approximately $1.4M) in cash, subject to some minor closing adjustments, for all of the key assets of VegaStream which were partly purchased through an administration process in the UK. In addition to the operating assets, Sangoma purchased the VegaStream share of VSNPL, a JV in India. Sangoma expects the VegaStream assets to begin to contribute to the company’s earnings during the second half of fiscal 2012 once it has integrated these operations and ramped up production, and be accretive for fiscal 2013.

About Sangoma Technologies Corporation
Sangoma Technologies is a trusted leader in delivering value-based Communications as a Service (CaaS) solutions for businesses of all sizes. Sangoma’s cloud-based Services include Unified Communication (UCaaS) business communications, Meetings as a Service (MaaS), Communications Platform as a Service (CPaaS), Trunking as a Service (TaaS), Fax as a Service (FaaS), Device as a Service (DaaS), and Access Control as a Service (ACaaS), Managed Internet Access, Managed Security, Managed SD-WAN. In addition, Sangoma offers a complete line of communications Products, including premise-based UC systems, a full line of desk phones and headsets, and a complete connectivity suite (gateways/SBCs/telephony cards). Sangoma’s products and services are used worldwide in leading UC, PBX, IVR, contact centers, carrier networks, office productivity, and data communication applications. Sangoma is also the primary developer and sponsor of Asterisk and FreePBX, the world’s two most widely used open-source communication software projects.
Cautionary Statement Regarding Forward Looking Statements

This press release contains forward-looking statements, including statements regarding the future success of our business, development strategies and future opportunities. Forward-looking statements include, but are not limited to, statements concerning estimates of future revenue, expected expenditures, expected future production and cash flows, and other statements which are not historical facts. When used in this document, the words such as “could”, “plan”, “estimate”, “expect”, “intend”, “may”, “potential”, “should” and similar expressions indicate forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. By their nature, forward-looking statements are based on the opinions and estimates of management on the date that the statements are made and involve numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other events contemplated by the forward-looking statements will not occur or will differ materially from those expected. Although Sangoma believes that the expectations represented by such forward-looking statements are reasonable based on the current business environment, there can be no assurance that such expectations will prove to be correct as these expectations are inherently subject to business, economic and competitive uncertainties and contingencies. Some of the risks and other factors which could cause results to differ materially from those expressed in the forward-looking statements contained in the management’s discussion and analysis include, but are not limited to changes in exchange rate between the Canadian Dollar and other currencies, the variability of sales between one reporting period and the next, changes in technology, changes in the business climate in one or more of the countries that Sangoma operates in, changes in the regulatory environment, the rate of adoption of the company’s products in new markets, the decline in the importance of the PSTN and new competitive pressures. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement and Sangoma undertakes no obligation to update forward-looking statements if circumstances or management’s estimates or opinions should change except as required by law. Readers are directed to Sangoma’s filings on SEDAR with respect to Management’s Discussion and Analysis of Financial Results for the basis of Sangoma’s reconciliation of EBITDA to net income as calculated under IFRS.

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Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Sangoma Technologies Corporation

David Moore
Chief Financial Officer
(905) 474-1990 Ext. 4107
dsmoore@sangoma.com
www.sangoma.com

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