Markham, Ontario, March 29, 2022 (GLOBE NEWSWIRE) — Sangoma Technologies Corporation (TSX: STC; Nasdaq: SANG) (“Sangoma” or “Company”), a trusted leader in providing cloud-based Communications asaService solutions A large company today announced the acquisition of NetFortris Corporation (“NetFortris”). With this acquisition, Sangoma will further accelerate to the top of SaaS telecommunications providers and extend its industry-leading cloud service suite with new MSP capabilities to provide Sangoma with more “one-stop shopping” for its customers. We provide even larger “wallet share”.
NetFortris provides UCaaS and cloud-based fully managed MSP (managed service provider) solutions for enterprises of all sizes and industries. It has approximately 250 employees and four major offices in Dallas, Seattle, Los Angeles and Manila. In addition to NetFortris’ UCaaS products, the MSP product line includes all mission-critical communications services customers need to complement their “as a service” application, including managed network security, managed SD-WAN, managed network access, and monitoring. Provide. .. These MSP services are built on a highly integrated, end-to-end managed network and are backed up by a team of expert network engineering 24/7. NetFortris has over 6,000 customers, over 60,000 seats in North America, a very low concentration of customers, and annual revenue is expected to be just over US $ 50 million.
Following the final stock purchase agreement dated March 28, 2022, Sangoma will charge NetFortris $ 68 million for prepaid fixed consideration (“prepaid consideration”) and up to $ 12 million for “income” (“accidental”). I bought it at. Consideration “), up to US $ 80 million if conditional consideration is fully earned. The transaction is now complete.
“A key part of our existing strategy and competitive differentiation is to provide our customers with the industry’s widest range of cloud communications services, eliminating the need to purchase five different services from five different vendors,” Bill Wignall said. Says. President and Chief Executive Officer of Coral. “The acquisition of NetFortris extends that strategy in a completely natural way. Customers can already get all the” aaS “products they are currently using from Sangoma, as well as managed network security, managed access, and more. Managed SD-WAN. This is really “one-stop shopping” for our customers and is taking advantage of a very important new trend that many in the industry believe is beginning to emerge. The acquisition presents an innovative and unique positive vision, and is most excited about the 11th acquisition in 11 years as it continues to move Sangoma forward in the market and differentiate itself from its competitors. I am. “
Strategic and financial basis
- There is growing recognition that customers prefer to use more and more communications services from one vendor. Not only over-the-top “aaS” cloud communication apps (UCaaS, CCaaS, TaaS, VMaaS, CPaaS, collaboration, etc.), but also network security / connectivity / redundancy / monitoring. They know what they need: Not only does this transaction meet its growth trends, but it also fits perfectly with the existing strategy of providing “one-stop shopping” by simply expanding the industry-leading “aaS” product suite. A new set of complementary MSP services.
See what industry-leading analysts say about this trend.
“Our research shows that customers want to go to one vendor for cloud communications and collaboration requirements, and many organizations buy additional services (cybersecurity, broadband, etc.) from UCaaS providers. I also like it. With the addition of NetFortris, Sangoma’s approach works very well for customers of all sizes, “said Elka Popova, VP of Connected Work Research at Frost & Sullivan.
In addition to end customers, some of Sangoma’s existing channel partners are already in the MSP business, giving them the opportunity to further meet their needs for such products and services.
- Very strong recurring revenue: NetFortris generates more than 90% of revenue from MRR, which brings Sangoma closer to 75% (proformer) of revenue from services.
- Expanding the scale and location of cloud communications: With an additional 60,000 seats and expected annual revenues of over US $ 50 million, it will help maintain Corgoma’s position at the top tier of the integrated market.
- Persuasive rating: Acquired a “large” cloud telecommunications company with about 1.3 times the profit.
- Diverse customer base with familiar channel models: With minimal concentration, an average customer lifespan of nearly 7 years, a customer base of over 6,000 clients, and a channel structure very similar to what Sangoma is currently using, tenacious clients are born.
- Open new potential M & A opportunities: New possible acquisition targets for MSPs in this category to complement the acquisition targets for the UCaaS space.
- Meaningful OPEX Synergies: From the first 6 months, expected annual cost savings opportunities have been identified.
- Strong management and operational talent: Deep skills and experience are invaluable in an era of fierce competition for talent.
The transaction included the purchase of 100% of NetFortris’ outstanding shares by Sangoma.
The combination of cash and common stock of coral has met the upfront consideration of US $ 68 million. The amount of prepaid cash was US $ 48.8 million and the amount of prepaid capital was US $ 19.2 million. Based on the fixed prepayment portion of the purchase price, the implicit valuation is about 1.3 times the expected annual revenue.
The cash portion of the prepaid consideration was funded by a combination of cash on hand and a modified line of credit with existing lenders to minimize dilution. Sangoma has a debt of approximately US $ 110 million on a proforma basis, which is approximately 2.3 times the adjusted net debt of EBITDA.1.. The share portion of the prepaid consideration is filled by issuing approximately 1.5 million shares of common stock of coral, and the number of common shares issued is the 15-day trading volume of common stock of coral as of March 25, 2022. Based on weighted average price. ..
Conditional consideration is based on the achievement of certain performance indicators and, to the extent earned, shall be paid in cash 12 months after the closing date.
INFOR Financial Inc. is a financial advisor to Coral and Norton Rose Full Bright US LLP, and Norton Rose Full Bright Canada LLP is a legal advisor to Coralma in the United States and Canada. Q Advisors LLC is a financial adviser to NetFortris and Dentons LLP is a legal adviser to NetFortris in the United States and Canada.
Sangoma will discuss the acquisition in more detail at a conference call on Tuesday, March 29, 2022, at 8:30 EST. The dial-in number for calls is 1-800-319-4610 (International 1-604-638-5340). Participants must dial 5-10 minutes before the scheduled start time and ask them to join the coral call.
1Adjusted EBITDA is a non-IFRS indicator that we use to monitor performance and the definition of this term can be found in a recently submitted MD & A posted on www.sedar.com. Net liabilities are non-IFRS indicators defined as the balance of principal under our credit line minus cash on hand.
About Sesame Technologies Co., Ltd.
Sangoma Technologies is a trusted leader in providing communication (CaaS) solutions as value-based services to enterprises of all sizes. Sangoma’s cloud-based services include Unified Communications (UCaaS) Business Communication, Contact Center as a Service (CCaaS), Video Conferencing as a Service (MaaS), Collaboration as a Service (Collab aaS), and Communication 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). In addition, Sangoma offers a full line of communications products, including a premises-based UC system, a full line of desk phones and headsets, and a complete suite of connections (gateway / SBC / telephony cards). Sangoma’s products and services are used in leading UCs, PBXs, IVRs, contact centers, carrier networks, office productivity, and data communications applications around the world. Sangoma is also the leading developer and sponsor of two of the world’s most widely used open source communication software projects, Asterisk and FreePBX.
Sangoma Technologies Corporation is listed on the Toronto Stock Exchange (TSX: STC) and Nasdaq (Nasdaq: SANG). For more information on coral, please visit www.sangoma.com.
Precautions regarding forward-looking statements
This press release may contain “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements”) within the meaning of applicable securities law. .. This includes, but is not limited to, a statement about NetFortris’ annual revenue. Net liabilities and adjusted EBITDA, and the expected impact of the acquisition of NetFortris on the company. For example, NetFortris’ annual revenue brings Sangoma closer to 75% (proformer) of service revenue.
Forward-looking statements are neither past facts nor guarantees of future performance. Coralma believes that the expectations reflected in these forward-looking statements are reasonable, but by their very nature, forward-looking statements are general that contribute to forecasting and predictability. And contains a number of assumptions, including specific, known and unknown risks and uncertainties. , The forecasts and other events expected in the forward-looking statements do not occur. Such assumptions include that NetFortris’ business continues to run at the same historical level, has no significant negative impact on NetFortris’ customer base or seat count, and such seat count remains at least 60,000. However, it is not limited to these. With NetFortris MRR consistent at over 90%, Sangoma can deliver post-closing synergies such as the ability to cross-sell Sangoma / NetFortris products to other customer bases and data center integration. Forward-looking statements are based on management’s opinions and estimates on the day of the statements, and various risks and uncertainties and others in which actual events or outcomes may differ materially from future expectations. Affected by the factors of. The statement you are looking at. These factors, risks and uncertainties include the risk that the acquired business will not function as expected, the risk that the acquired business will not be well integrated, and the factors described in detail in “Risk Factors”. However, it is not limited to these. An annual information form section and up-to-date management discussions and analysis (available on SEDAR’s profile at www.sedar.com, respectively).
Readers should be careful not to overly rely on forward-looking statements. There is no guarantee that plans, intentions, or expectations will arise based on them. The forward-looking information contained in this press release represents our expectations as of the date specified here and is subject to change after that date. However, Sangoma undertakes no obligation to update any forward-looking statement if circumstances or management estimates or opinions change, except as required by law. The forward-looking statements contained in this press release have been explicitly modified by the above notice.
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Sangoma announces acquisition of NetFortris, Canadian Business Journal
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