Ontario, Canada-based Sangoma Technologies, a provider of Unified Communications solutions, has announced the strategic acquisition of VoIP Innovations, LLC (VI), a privately-held technology company in Pittsburgh, PA that specializes in wholesale SIP trunking. This acquisition, Sangoma’s eighth in the last eight years, is expected to provide the combined company with several strategic advantages, including increased scale, a recurring revenue contribution that continues to grow, an entirely new product category in Communications Platform as a Service (CPaaS), robust EBITDA margins, and a new sales channel.
Bill Wignall, President and CEO of Sangoma, said, “We continue to look for prudent ways to grow our product portfolio, customer base, distribution network, overall sales, recurring revenue and EBITDA. This acquisition is strategic to Sangoma for all of those reasons, and with about 90% of VI revenue being recurring, it should increase Sangoma’s proforma recurring / services revenue to approximately 45% of total sales.”
In accordance with the terms of the contract, Sangoma has already paid USD 36 million, consisting of USD 30 million in cash and USD 6 million in Sangoma common shares. Furthermore, there is a contingent consideration component of up to USD 6 million that will be paid in cash upon achievement of certain revenue milestones within twelve months from the closing date. As a result, the total purchase price would be USD 42 million, on a debt-free and cash-free basis, subject to customary net working capital adjustments.
VoIP Innovations offers its services to resellers, service providers, MSPs, and call center customers across North America and has over 1400 customers and about 35 employees. The company has recently launched its new, strategic CPaaS product that enables developers to add communication capabilities (such as voice, video, messaging, etc.) to their software and web applications without the need to be specialists in communications and networking.
Jason Tapolci, co-founder, shareholder and CEO of VoIP Innovations, said, “Of all the buyers who considered the acquisition of VI, it became very clear to us that Sangoma was the company that most understood, appreciated and valued our long-term staff, loyal customers and company vision. We are very pleased that Sangoma will continue on with the VI business and we are confident it will continue to grow under the leadership of their very capable management.”
In a statement, the company said that VoIP Innovations’ employees will continue to work from their current Pittsburgh office and will be led by Sebastian Kiely, VI’s President, who will report to Sangoma’s CEO, Bill Wignall.
