BRC Group Holdings, Inc. Agrees to Acquire Sangoma Technologies Corporation to Scale Communications Portfolio

Transaction values Sangoma at an enterprise value of approximately $204 million (C$289 million)

BRC Group Holdings, Inc. (NASDAQ: RILY) ("BRC" or the "Company"), a diversified holding company, and Sangoma Technologies Corporation (TSX: STC; NASDAQ: SANG) ("Sangoma"), a trusted industry leader delivering cloud-based, on-premises, and hybrid communications solutions, announced a definitive agreement under which a wholly owned subsidiary of BRC will acquire all issued and outstanding common shares of Sangoma. The transaction values Sangoma at an enterprise value of approximately $204 million (C$289 million).

Bryant Riley, Chairman and Co-CEO of BRC Group Holdings, said: "Our communications portfolio is a proven engine for cash generation, and we believe acquiring a scaled operator like Sangoma accelerates our recurring revenue and earnings power. Through this transaction, we are deploying capital where we see the most compelling opportunity to add durable, recurring cash flow while expanding the enterprise-grade capabilities that our communications portfolio companies offer to the market."

Ananth Veluppillai, CEO of BRC Telecom, added: "Over the last decade, we have built an ecosystem that allows established communications businesses to operate at their full potential. We have successfully brought five companies onto this platform, providing the operational stability they need to serve their customers while generating significant, sustainable value. Sangoma has built an incredible enterprise-grade architecture and a highly loyal customer base. By combining their strengths with our proven operating model, we are creating a more robust platform for both our customers and our shareholders."

Strategic Acquisition of Sangoma

Founded in 1984 and headquartered in Markham, Ontario, Sangoma serves more than 100,000 business customers across a base of over 2.7 million unified-communications seats. Its comprehensive solutions span UCaaS, contact center, CPaaS, and connectivity. The platform offers the extensibility to serve customers from small business through the mid-market, anchored by robust, enterprise-grade architecture.

The addition of Sangoma's capabilities - including its AI-enabled customer experience and contact-center solutions - significantly expands the range of offerings within BRC's communications portfolio, complementing its established strengths in the SMB and enterprise markets. Upon closing, Sangoma will be held as part of BRC Telecom, BRC's portfolio of communications businesses, currently comprised of UOL, magicJack, Marconi Wireless, and Lingo (which includes BullsEye Telecom).

BRC's communications portfolio was formed on the basis of acquiring mature, late-stage companies with predictable revenues, strong gross margins, and meaningful cash flow potential. Since 2016, the Company has acquired five communications businesses with an aggregate total investment of approximately $303 million. Through 2026, these businesses have generated approximately $411 million in cumulative cash distributions — approximately 1.4x their total acquisition cost. On a trailing-twelve-month basis as of June 2026, BRC's communications businesses generated approximately $52 million of combined segment income.

BRC's communications portfolio continues to execute against plan as a reliable engine of cash generation, and the addition of Sangoma represents an ideal continuation of this acquisition thesis. On a combined, trailing-twelve-month basis as of June 2026, BRC's communications businesses and Sangoma generated approximately $441 million of revenue, reflecting approximately $241 million from BRC's communications businesses and approximately $200 million from Sangoma, as reported by Sangoma.

Transaction Detail

The transaction will be completed by way of a plan of arrangement under the Business Corporations Act (Ontario). Under the terms of the agreement, Sangoma shareholders will receive $4.925 in cash and 0.04767 of a BRC share for each Sangoma share held. In the aggregate, Sangoma shareholders will receive approximately $170 million in cash and approximately $10 million in BRC shares. Upon completion, current Sangoma shareholders will hold approximately 4% of BRC's pro forma outstanding shares. In connection with the closing of the transaction, the shares of Sangoma will be delisted from the Toronto Stock Exchange and Nasdaq Stock Market, and BRC will become a reporting issuer under applicable Canadian securities laws.

The transaction is expected to be partially funded through an amended and restated $215 million senior secured term loan facility at BRC's communications-platform level, together with an equity contribution from BRC. The facility will also be used to retire the existing debt of BRC's communications businesses. Banc of California (NYSE: BANC) is serving as sole lead arranger, bookrunner, and administrative agent on the facility, together with Axos Bank (NASDAQ: AX) and Israel Discount Bank of New York as lenders. The transaction is not subject to any financing condition.

The transaction has been unanimously approved by the board of directors of BRC and the board of directors of Sangoma. Completion is subject to approval by at least two-thirds of the votes cast by holders of Sangoma shares present in person or represented by proxy at a special meeting of Sangoma shareholders (the "Meeting"), a simple majority of the votes cast by holders of Sangoma shares present in person or represented by proxy at the Meeting, excluding the Sangoma shares required to be excluded pursuant to Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions, applicable court and regulatory approvals, and other customary closing conditions. The transaction is expected to close no later than early 2027.

Advisors

Blake, Cassels & Graydon LLP is acting as Canadian legal counsel and Choate, Hall & Stewart LLP, Klein Law Group PLLC and The NBD Group, Inc. are acting as US legal counsel to BRC. ATB Cormark Capital Markets is acting as the exclusive financial advisor and fairness opinion provider to Sangoma. Goodmans LLP is acting as Canadian legal counsel and Norton Rose Fulbright LLP is acting as US legal counsel to Sangoma.