PRESS RELEASE: Sangoma Technologies Corporation, a trusted leader in delivering Unified Communications solutions for SMBs, Enterprises, OEMs, and Service Providers, both on-premises and in the cloud announced the planned acquisition of VoIP Supply LLC.
VoIP Supply, the ‘Everything You Need for VoIP’ company, is based in Buffalo, New York, and is one of the industry’s most successful, well known, and respected channel partners. It has been providing customers in North America with one-stop shopping for a complete range of telecom solutions from leading manufacturers, for over 15 years.
“We are always looking for ways to prudently add scale to our business”, said Bill Wignall, President and CEO of Sangoma. Wignall continued, “VoIP Supply is one of our top channel partners in the US for both premise-based as well as cloud-based solutions, so their very strong online presence, web traffic, and ecommerce/inside-sales model will be an excellent strategic addition to our business. Further, this acquisition will provide Sangoma even closer contact with key resellers, system integrators, and end-users, deepening our relationships with these important clients. I would like to personally welcome all the VoIP Supply employees to the growing Sangoma family and I look forward to contributing to VoIP Supply’s long history of successfully serving the needs of their customers.”
The transaction is subject to standard closing conditions and is expected to close in early July 2017.
“When I started VoIP Supply in 2002”, said Ben Sayers, founder and CEO of the company, “it was with a vision of offering full communications solutions to businesses, by leveraging the growing importance of the internet to provide information and purchase options. This was at a time when only 5-10% of people had broadband access in the US. Sangoma is one of the few companies in our industry that understands that vision and I’m very pleased to see VoIP Supply become part of a larger, thriving business with more resources, one that is committed to taking excellent care of our loyal customers and our dedicated staff.”
VoIP Supply, which is profitable, will operate as a separate subsidiary of Sangoma with the appropriate autonomy that distribution businesses require.
“Putting together a manufacturing and a distribution business requires a careful balance,” said Tony Lewis, COO of Sangoma. “That is critical to ensuring that each company obtains the intended benefits, while still maintaining the independence that VoIP Supply needs to continue its long track record of proven success. This particular acquisition is quite unique to this specific situation in the US. In other countries, we rely heavily upon the local language, culture, reputation, and customers that our valued partners in those regions offer and look forward to continuing the strong, mutually beneficial relationships we’ve built together over many years.”
Following the closing of the acquisition, VoIP Supply’s current President, Paula Griffo, will continue to lead the company on a permanent basis, providing stability and reassurance to VoIP Supply’s employees, suppliers, and customers.
“I am very excited about Sangoma’s ownership bringing a new level of energy, commitment, and opportunity to the business,” said Paula Griffo. “Telecom is a competitive industry, so having the expanded resources and capabilities of a larger, growing, successful company like Sangoma is really going to help our excellent team here meet the needs of even more customers, in new and innovative ways. And I would like to take this opportunity to strongly reassure our valued manufacturing partners and suppliers that our commitment to you is unwavering. VoIP Supply will continue to sell the broadest mix of products from the top manufacturers in the industry and after extensive discussions with Sangoma, I’m very pleased to confirm that our new owners fully embrace and support this strategy.”
Terms of the transaction will be more fully described in subsequent disclosures as required, but in summary, Sangoma is acquiring all of VoIP Supply from its LLC members. For all the membership interests in VoIP Supply LLC, Sangoma will pay initial consideration of US$3.0 million in cash, issue 993,627 common shares for a deemed value of US$0.6 million (at C$0.80/share), and enter into an agreement for contingent consideration of up to US$0.4 million if certain targets are achieved in the first year post closing. In conjunction with this transaction, Sangoma has extended the company’s borrowing capability with its current Canadian bank from C$2.5 million to C$4.5 million.
Outlook for fiscal years 2017 and 2018
The purchase of VoIP Supply will close shortly after the end of Sangoma’s fiscal year 2017, and so will have no material impact on Sangoma’s financial results for the current fiscal year that will end in two weeks on June 30. As a result, previously issued guidance and commentary on revenue and EBITDA for fiscal 2017 remains unchanged.
For the fiscal year 2018, Sangoma has previously provided guidance and committed to updating that guidance at the time it releases full year results for fiscal 2017. The company expects that in fiscal 2018, the acquisition of VoIP Supply will be accretive, will add over C$15m in revenue to Sangoma, and will result in total revenue in excess of C$45 million.
More detailed guidance, updated for the VoIP Supply acquisition, will be provided at the time the company releases it’s fiscal 2017 financial results.
INFOR Financial Inc. acted as the financial advisor to Sangoma in connection with the acquisition of VoIP Supply.