Sangoma Announces Strategic Acquisition of VoIP Innovations, LLC

18 Oct 2019

Sangoma Technologies Corporation (TSXV:STC) (“Sangoma” or the “Company”), a trusted leader in delivering Unified Communications solutions, both in the cloud and on-premises, and the provider of the two most widely used open source communications software products in the world, has acquired VoIP Innovations, LLC (“VI”) today.

VI is a privately-held, Pittsburgh-based technology company that specializes in wholesale SIP trunking offered primarily to resellers, service providers, MSPs, and call center customers across North America, utilizing a recurring revenue model. VI has over 1,400 customers (with no significant customer concentration), about 35 employees, and has been growing consistently the last several years. The company has also recently launched its new, strategic Communications Platform as a Service (or CPaaS) product. CPaaS is an exciting new product category receiving significant attention from customers and investors alike, that enables developers to add communication capabilities (such as voice, video, messaging, etc.) to their software and web applications without having to be communications nor networking experts.

Sangoma’s pedigree in the SIP Trunking business is underscored by its performance in the recent report titled “2019 SMB SIP Trunking Customer Satisfaction”, conducted by the Eastern Management Group. The report details a survey of 3,000 IT managers in a side-by-side comparison of 29 SIP trunk providers. Customers evaluated their SIP vendors on six Customer Satisfaction Measurements under the headings of product, vendor experience, and customer delight. In Eastern Management Group’s survey, Sangoma received the highest possible ranking — four stars, in every customer satisfaction measurement: technology and product, purchase experience, support, management tools, total overall satisfaction, and recommend-to-a-friend. Out of 29 SIP trunking companies examined in the Eastern Management Group’s latest survey, none beat Sangoma. No vendor other than Sangoma received the highest possible ranking — four stars — in every customer satisfaction category.

“We continue to look for prudent ways to grow our product portfolio, customer base, distribution network, overall sales, recurring revenue and EBITDA,” said Bill Wignall, President and CEO of Sangoma. Wignall continued, “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. We know the SIP trunking business well, so adding a wholesale channel model to our existing go-to-market approach is quite strategic and it may provide the sales organizations for both companies with additional revenue synergies. We are also excited to now add a CPaaS offering to our growing product portfolio. I’d like to welcome all of our new staff who I’m very pleased to say will be staying with the company, as well as our valued new clients and partners, to the expanding Sangoma family.”

The acquisition, Sangoma’s eighth in eight years, provides the combined Company with several strategic advantages including: increased scale, a recurring revenue contribution that continues to grow, an entirely new product category in CPaaS, robust EBITDA margins, and an excellent new sales channel that has expressed the desire for Sangoma’s broader portfolio.

“One of the things that mattered most to us as former owners, was how the buyers would handle the VI employees and customers,” said Jason Tapolci, co-founder, shareholder and longtime CEO of VoIP Innovations. “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. We have had the pleasure of getting to know the Sangoma team through these discussions and are excited to see VI taken to the next level.”

VoIP Innovations’ employees will continue to work out of their current Pittsburgh office and will be led by Sebastian Kiely, VI’s President, who will report to Sangoma’s CEO, Bill Wignall.

Read the full release.