BRC Group Holdings Announces Acquisition of Sangoma Technologies

What Happened
BRC Group Holdings, Inc. (RILY) announced a definitive Arrangement Agreement to acquire all outstanding common shares of Sangoma Technologies Corporation by a court‑approved plan of arrangement. Sangoma shareholders will receive 0.04767 of a BRC common share plus US$4.925 cash per Sangoma share; the deal is expected to close in January 2027, subject to shareholder, court and regulatory approvals (including TSX, NASDAQ and U.S. antitrust clearance). Sangoma’s board and a special independent committee unanimously recommended the transaction, and ATB Capital Markets provided a fairness opinion to Sangoma’s committee and board.

Key Details

• Consideration: 0.04767 BRC share + US$4.925 cash per Sangoma share. BRC shares issued rely on the Section 3(a)(10) exemption.
• Equity/compensation treatment: outstanding RSUs/PSUs/DSUs will be cashed out at US$5.225 per share (PSUs valued at 100% of target); legacy options will be cashed out for the excess of US$5.225 over the exercise price.
• Voting support: Sangoma directors and senior officers holding ~27% of Sangoma shares signed Voting Support Agreements to vote in favor and block competing proposals.
• Financing: Commitment letters for $212,255,000 in senior secured term loans from Banc of California, Axos Bank and Israel Discount Bank of New York; BRC equity contribution ~$38 million and telecom-subsidiary equity contribution ~$16 million. The Transaction itself is not subject to a financing condition.
• Debt/credit changes: New Telecom Facility will replace an existing facility that had $71.5M outstanding (as of Sept. 30, 2026); BRC also entered Amendment No. 6 to its Oaktree credit agreement providing consents and waivers for the Transaction and requiring 50% of certain telecom cash distributions to prepay term loans (subject to a prepayment premium).
• Other: Termination fee of US$5,397,000 payable by Sangoma in certain circumstances; Sangoma’s shares expected to be delisted from TSX and NASDAQ after closing.

Why It Matters
This is a material acquisition for BRC that combines cash and stock consideration, will increase BRC’s telecom holdings and involve sizable new debt financing ($212.3M commitment) plus equity injections. For investors, key implications include potential share dilution from the stock element, higher leverage on closing due to the new loan facility, and near‑term integration and regulatory risks (shareholder approval, court approval, TSX/NASDAQ and antitrust clearances). The insider voting support (~27%) and unanimous Sangoma board recommendation reduce deal execution risk, but the transaction remains subject to customary closing conditions and regulatory review.