Pursuant to the Agreement, Sangoma will acquire Star2Star (the “Acquisition”) for approximately US$437 million, consisting of US$105 million in cash and 110 million common shares of Sangoma. The transaction will be subject to approval by Sangoma shareholders at a special meeting of shareholders expected to be held in late March or early April 2021 (the “Special Meeting”), with closing expected to occur shortly thereafter.
“Customers today are demanding an integrated buying experience for all their communications needs and the combination of Sangoma and Star2Star will satisfy that need with the broadest set of cloud-native CaaS and related solutions in the industry,” said Bill Wignall, President and CEO of Sangoma. “This transaction ensures we can meet any customer’s preference, be it for purely cloud solutions, or for on-premise deployments, or a hybrid combination, all the way from small businesses to large enterprises. For many years, we have consciously pursued a strategy to transform Sangoma from a product business to one of the communications industry’s leading SaaS companies. This deal is incredibly exciting not only because it will generate scale in a growing, consolidating space, but also because by combining with Star2Star we will have completed our long-term evolution into a leading cloud services company, one with annual revenue approaching $250 million.”
Star2Star, based in Sarasota, Florida, is a privately-held leading provider of full-spectrum, internally developed, cloud-native communications services delivered via a high availability, multi-tenant platform. Star2Star targets the highest value market segments in business communications, including mid-market and enterprise size customers, through solutions that enable digital transformation. Star2Star’s offerings include a comprehensive suite of voice, contact center, collaboration, integration, video meetings, Communications Platform as a Service (CPaaS), and Desktop as a Service solutions that work on any device from PC’s to desk phones to mobile softphones, all accessible from anywhere. For the trailing twelve months ended September 30, 2020, Star2Star generated approximately $107 million of revenue (US$79.4 million) on an unaudited basis and in accordance with U.S. GAAP, over 80% of which was recurring. Over the same period, and on the same basis, Star2Star produced over $19 million of adjusted EBITDA (US$14.7 million) and adjusted net income of $3.5 million (US$2.6 million). As of September 30, 2020, Star2Star had total assets of $46.9 million (US$35.2 million) and liabilities of $80.9 million (US$60.6 million).