Sarasota's Star2Star Communications acquired for $437 million
Laura Finaldi
A Sarasota-based telecommunications services provider has been acquired by a Canadian technology company, a move that will make the local company's services available around the world.
Star2Star Communications, the Sarasota-based creator of a cloud-native collaboration platform for businesses, has been purchased for $437 million by Sangoma Technologies Corporation of Ontario, Canada.
Sangoma, which is publicly traded, is also in the communications-as-a-service business. Combined, the two companies will have a global presence with more than $245 million in revenue – including $79.4 million from Star2Star – and offer a fully integrated suite of cloud communications solutions.
It will also allow Sangoma to deploy Star2Star's cloud solutions to more than 100 countries around the world. Right now, the company's platform is available only within the U.S.
Bill Wignall, president and CEO of Sangoma, said in a statement that the transaction ensures the combined companies will be able to satisfy the communications needs for businesses of all shapes and sizes.
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"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 (communications-as-a-service) and related solutions in the industry," Wignall said.
Norman Worthington, founder and CEO of Star2Star, said Sangoma and the company he founded have several complementary strengths. Star2Star was founded in 2006 in Sarasota by Worthington and Joe Rhem.
"Sangoma was the perfect fit for us because they identified and appreciated our talented team, loyal customers and unique go-to-market approach," Worthington said. "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."
Wignall will remain president and CEO of Sangoma, and Worthington will be added as chairman. NewSpring Capital, an institutional investor in Star2Star, will be able to appoint one member to the company's board.
Sangoma is financing the transaction with $105 million in cash and 110 million common shares of Sangoma. Shareholders will be asked to approve the sale at a special meeting to be held in late March or early April.
Once the transaction is closed, Sangoma said it expects to have about $101 million in debt and 133,487,735 common shares outstanding, including 16.5 million owned by Star2StarHoldings LLC.