MARKHAM, ONTARIO, January 9, 2018 –Sangoma Technologies Corporation (TSX VENTURE:STC), a trusted leader in delivering Unified Communications solutions for SMBs, Enterprises, OEMs, and Service Providers, both on-premises and in the cloud, today announced the acquisition of all key assets of the Converged Communication Division from Dialogic Corporation.
Dialogic, one of the industry’s true pioneers in the transition from PSTN to IP and Cloud based networks, is headquartered in Parsippany, New Jersey. It is one of the most recognized, reputable and respected brands in the industry. The CCD division offers a full line of gateways and interface boards, with over 25% of sales in recurring services revenue, to customers around the globe.
“We continue to look for prudent ways to grow our customer base, our product portfolio, our talented team of employees, our distribution network and our overall revenue”, said Bill Wignall, President and CEO of Sangoma. Wignall continued, “This acquisition, our sixth in 6 years, is expected to add approximately $15 million of sales over the next twelve months. It is one more step along the way, as we seek to add scale to our business by augmenting our organic growth with selective acquisitions, during a time of industry consolidation. I’d like to welcome all our new staff and clients to the growing Sangoma family.”
The acquisition provides Sangoma with several strategic advantages, including: accelerated sales growth, expanded recurring revenue, stronger gross margins, increased profitability, about 45 excellent employees at a time when competition for talent is increasing, and complementary products that the Company understands well. In addition, this acquisition will add hundreds of larger enterprise/service provider/OEM customers, dozens of leading channel partners around the world, and strong supply chain capabilities which will allow Sangoma to significantly expand the scale and scope of its operations. The CCD product lines will become an integral part of the Sangoma portfolio over the coming year.
Following the acquisition, the General Manager of CCD, Mr. Jim Machi will join Sangoma and continue to lead the division, providing continuity and reassurance to CCD employees, customers, and channel partners across the globe.
“I am extremely excited about joining the expanding Sangoma family”, said Jim Machi, General Manager. Machi continued, “I really look forward to continuing to serve the customer base I have known for a long time, with Sangoma’s broad portfolio of on-premise or cloud-based solutions. The team here is eager to be part of a successful growth company like Sangoma.”
“This transaction is part of a broader strategy we put in place when I was appointed CEO,” said Bill Crank, President and CEO of Dialogic. “Sangoma offers the CCD customers, partners, and employees the best possible combination of product and services continuity, so we are very pleased with this outcome for all parties.”
Terms of the transaction will be more fully described in subsequent disclosures as required, but in summary, Sangoma is acquiring all the key assets of the CCD division for approximately $5.7 million in cash, at closing, subject to customary working capital adjustments. In conjunction with this transaction, Sangoma has extended the company’s borrowing capability with its current Canadian bank from $4.5 million to $8.5 million, to ensure that it continues to have the flexibility to grow.