Newsroom | Press Release

Sangoma Announces Sixth Acquisition in Six Years

Buying All Key Assets of CCD Division from Dialogic Corporation

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.

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, service providers and OEMs.  Sangoma’s offerings include Unified Communication (UCaaS) and Call Center as a Service (CCaaS) business phone systems, both on-premise and cloud, Communications Platform as a Service (CPaaS), SIP trunking services (TaaS), and telephony hardware which can also be deployed as a service. Sangoma’s products and services are used in leading PBX, IVR, contact center, carrier networks, and data communication applications worldwide. Sangoma is the primary developer and sponsor of the Asterisk project, the world’s most widely used open source communications software, and the FreePBX project, the world’s most widely used open source PBX software. Businesses can achieve enhanced levels of collaboration, productivity, and ROI with Sangoma.

https://www.sangoma.com

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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