Sangoma Announces Definitive Agreement to Acquire Star2Star

29 Jan 2021

Sangoma Technologies Corporation, a trusted leader in delivering cloud-based Communications-as-a-Service (“CaaS”) solutions, today announced it has entered into a stock purchase agreement dated January 29, 2021 to acquire StarBlue Inc. (dba Star2Star Communications. This acquisition represents a transformational milestone for Sangoma and positions it in the upper echelon of the industry’s leading companies. 

Pursuant to the Agreement, Sangoma will acquire Star2Star 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, 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). 

“We are thrilled to combine forces with Sangoma because we have so many complementary strengths,” said Norman Worthington, founder and CEO at Star2Star.  “Sangoma was the perfect fit for us because they identified and appreciated our talented team, loyal customers and unique go to market approach.  Star2Star has a differentiated channel approach, employing over 650 active partners across multiple types of channels, from resellers and interconnects, to managed services providers and enterprise technology partners to wholesale and white label distributors.  Finally, I’ve come to genuinely appreciate Bill’s vision for our combined companies.  We share a view on how to profitably grow in this exciting market, a viewpoint that’s unique in our industry.”

Compelling Strategic and Financial Rationale

Creates the Necessary Scale and Establishes Sangoma as a Top-Tier Cloud Communications Company: the combined company will have a global presence with over $245 million in revenue (trailing twelve-months as of September 30, 2020) which is increasingly important in an environment of consolidation. 

Results in the Industry’s Most Complete, Fully-integrated Suite of Cloud Communications Solutions: a full-spectrum offering is now available to meet customers’ growing demand for a ‘one-stop-shop’ solution for all unified communications needs in multiple deployment environments, including on-premise, cloud, and hybrid.

Highly Attractive Financial Profile with Complementary Corporate Strategies: adds approximately $107 million of high-quality, mostly high-margin annual recurring revenue from Star2Star with a compelling adjusted EBITDA profile. A combined top-line revenue of over $245 million ranks Sangoma in the upper-echelon of publicly traded peers with the additional benefit of profitability, unlike many competitors.

Completes Sangoma’s Long-term Evolution from a Product Company to a Cloud Services/SaaS Business: Sangoma has now transitioned from a pureplay, one-time sales hardware company, to a software and services business with a recurring revenue model. Pro-forma recurring services revenue would account for approximately 70% of total revenue (trailing twelve-months as of September 30, 2020), positioning Sangoma amongst its top-tier peers.

Unique, Differentiated Go-To-Market Approaches: the combined company’s sales channels represent the widest, most differentiated types of channels relative to peers and will build upon Star2Star’s presence and renowned reputation amongst channel partners and wholesale partners. Furthermore, Star2Star has a strong foothold in the rapidly growing, but underpenetrated, mid-market and enterprise customer segments, enabling Sangoma to capture the entire customer spectrum.

International Opportunity to Expand Cloud Solutions to Less Penetrated Regions: while Star2Star has focused exclusively on the U.S. market, the combination will enable Sangoma to deploy Star2Star’s cloud solutions to its global customer base in over 100 countries, where cloud native solutions are relatively under penetrated and less competitive.

Combination of Two Exceptional Management Teams with Deep Sector Expertise: both teams exhibit cultural alignment and combine decades of experience in the unified communications industry, which will serve as a strategic competitive advantage going forward.

About Sangoma Technologies Corporation

Sangoma Technologies is a trusted leader in delivering Unified Communications and Unified Communications as a Service (UCaaS) solutions for SMBs, Enterprises, OEMs, Carriers and service providers. Sangoma’s globally scalable offerings also include industry leading Voice-Over-IP solutions, which together provide seamless connectivity between traditional infrastructure and new technologies. Sangoma’s products and services are used in leading PBX, IVR, contact center, carrier networks and data-communication applications worldwide. Businesses can achieve enhanced levels of collaboration, productivity and ROI with Sangoma. Sangoma is the primary developer and sponsor of the Asterisk project, the world’s most widely used open source communications software and FreePBX, the world’s most widely used open source PBX software. Everything Connects, Connect with Sangoma!

Founded in 1984, Sangoma Technologies Corporation is publicly traded on the TSX Venture Exchange (TSX VENTURE: STC). Additional information on Sangoma can be found by visiting

About Star2Star

In an increasingly complex world, businesses need to simplify the way they communicate, collaborate, and seamlessly integrate third-party applications into their operations and processes. Star2Star meets that need with its patented cloud-native collaboration platform designed for the modern enterprise that extends the company’s record of success in maintaining a 99.4% customer retention rate.

Star2Star has delivered consistently innovative solutions to enterprise communication and collaboration challenges since 2006. Throughout its history, it has demonstrated a commitment to the continuous upgrading of cutting-edge technology to anticipate and address rapidly evolving enterprise needs. The company entered the market as the only UCaaS provider with an on-premises cloud platform that combined cloud flexibility with an ultra-reliable proprietary network. Today, its suite of enterprise communication and collaboration solutions offers unparalleled value, reliability, quality, scalability, and capacity to unify people and processes within an intuitive, cloud-native environment. 

Star2Star has been named to such prestigious lists as the Deloitte Technology Fast 500, Inc. 500|5000, Omdia Top 10 UCaaS Service Provider, and Forbes Most Promising Companies. Recognition of its pioneering innovation in the enterprise cloud market extends to major industry analyst indicators such as inclusion in the Frost Radar North American Hosted IP Telephony and UCaaS Industry reports.



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