Sangoma Jumps but Still Trades Under the C$7.40 Takeout
Sangoma Technologies closed 38.2% higher on Tuesday at C$6.98 on the TSX, after agreeing to be acquired by BRC Group Holdings in a deal announced after Monday’s close. At that close the stock still sits 5.7% under the C$7.40 a share the company put on the transaction, and about a fifth of that gap has nothing to do with whether the deal closes.
| Monday close | Tuesday close | Change | |
|---|---|---|---|
| Sangoma (TSX: STC), C$ | 5.05 | 6.98 | +38.2% |
| Sangoma (Nasdaq: SANG), US$ | 3.59 | 4.93 | +37.3% |
| BRC Group Holdings (Nasdaq: RILY), US$ | 5.49 | 4.92 | -10.4% |
The Tuesday column is the September 29 close. Data as of September 29, 2026. Quotes from Yahoo Finance.
Sangoma traded between C$6.90 and C$7.09, on 1,848,101 TSX shares, 6.3x the 292,000 the previous nine sessions traded combined. Its market capitalisation at C$6.98 is about C$234 million, on the 33,503,340 common shares the company reported outstanding as of the date of its year-end Report to Shareholders. The two listings agree on the price: SANG at US$4.93 times a USD/CAD rate of 1.4182 is C$6.99, within 0.2% of the TSX mark, which matters because it establishes that the Canadian quote is neither stale nor mispriced: the arithmetic that follows holds on either line. It does not make the TSX the cheaper currency bet. The cash is denominated in US dollars and the stub is a Nasdaq share whichever venue a holder buys on.
Only part of the payout is cash
Per Sangoma share, holders are to receive US$4.925 in cash plus 0.04767 of a BRC common share. Sangoma’s arrangement agreement release values that at US$5.225, or C$7.40, using BRC’s 20-day VWAP on Nasdaq and an exchange rate of 1.417. The share half accounts for US$0.302 of it.
That split is the whole story of Tuesday’s gap. The C$7.40 is not a fixed price anyone can lock in: it is a fixed cash amount plus a floating stub of acquirer stock, converted at a rate that will not be the rate on closing day. In aggregate the release puts the consideration at US$170 million of cash and US$10 million of BRC shares, the latter described as “freely tradable”, for an enterprise value of approximately US$204 million, or C$289 million. That US$170 million stretches further than the 33,338,932 basic shares Sangoma’s year-end financial statements show outstanding at June 30, 2026, and the company’s own disclosure accounts for the difference almost exactly. Divide the aggregate by the US$4.925 cash and it implies 34,517,766 shares; the Report to Shareholders states that 33,503,340 common shares, 94,000 stock options and 912,704 share units are issued and outstanding as of the date thereof, which totals 34,510,044, or 7,722 shares short of the implied figure. That residual is noise rather than a discrepancy: US$170 million is itself rounded to the nearest million, which leaves the implied count good only to about 101,500 shares either way, so a 7,722-share difference sits an order of magnitude inside the rounding of the input. The company’s disclosure and the aggregate cash describe the same share base. What separates both from the June 30 basic count is 164,408 common shares issued since then plus the incentive securities the release’s forward-looking section flags as “the treatment of Sangoma’s incentive securities”, cashed out beside the common shares. Sangoma holders end up with about 4% of the combined company, and the stated premium is approximately 47% to Monday’s TSX close and 51% to the 10-day VWAP.
What is being bought matters as much as the price, and those numbers landed the same night. Start with the quarter Sangoma reported alongside the deal in our coverage of Sangoma’s fiscal fourth quarter and the BRC takeover: revenue under guidance, a revision of previously reported quarterly figures caused by the ERP migration, which management assessed and “concluded that the impact was not material to any period”, and a US$68.4 million goodwill write-off.
The counterparty on the other side of the stub
BRC Group Holdings trades on Nasdaq under RILY. The release describes it as “a diversified holding company with established operations across financial services, communications, and retail, as well as strategic investments in equity, debt, and venture capital”, and says Sangoma will operate as part of BRC Telecom after closing.
In the first session after the announcement, BRC fell 10.4%, on 2,032,047 shares against Monday’s 432,100, or 4.7x, and traded as low as US$4.56, which is 16.9% below Monday’s close. Its market capitalisation at US$4.92 is about US$198 million. That matters twice over to a Sangoma holder: the stub they receive is BRC stock they keep after closing, and it is BRC’s own share price that marks the payout down below C$7.40 between now and then.
Marking the offer to Tuesday’s close
The arithmetic that follows is ours, built from the release terms and Tuesday’s closing quotes. Divide the release’s US$0.302 share half by the 0.04767 exchange ratio and you get an implied BRC reference price of US$6.335. BRC at US$4.92 is 22.3% below that reference. Mark the stub to the close and 0.04767 x US$4.92 comes to US$0.2345, so the total consideration marks to US$5.1595 against the US$5.225 in the release. Cash is 95.5% of it.
Converted at the release’s 1.417, that is C$7.3111, so BRC’s move costs a Sangoma holder C$0.0928 a share. USD/CAD was 1.4182 when the equities closed, essentially the rate the company used, and at that rate the payout marks to C$7.3174. Currency adds back C$0.0063. The cash share also bounds how much more damage BRC can do. On our arithmetic a further 20% fall in BRC takes the payout down 0.91%, to C$7.2509, and even a further 50% fall costs 2.27%, leaving C$7.1511 and still 2.45% above Tuesday’s close. The stub is the part that floats. It is not the part that decides whether this works.
Now set that against the screen. The release’s C$7.40 is C$7.4038 before rounding, so the headline gap from C$6.98 is C$0.4238, or 5.7% of the stated deal value. Of that, C$0.0864, 20% of the gap, is the acquirer’s share price and the exchange rate rather than deal risk. The residual is C$0.3374, 80% of the gap. Against the marked payout of C$7.3174 that is a 4.61% discount, or 4.83% of upside from C$6.98 if the deal closes and the marks hold.
What the market is pricing on the odds of closing
That residual can be turned into a probability, which is more useful than the discount itself. Our arithmetic solves for the P where P times the C$7.3174 payout, plus one minus P times whatever the stock would trade at if the deal died, equals C$6.98.
The difficulty is the break price, because nobody knows it. Monday’s C$5.05 close predates the fiscal fourth-quarter results released the same evening, so the market never priced that quarter standing on its own, which makes C$5.05 the generous end of the range rather than the obvious anchor. So we ran it across a range:
| If the deal broke at | Implied chance of closing | Downside per share | Downside |
|---|---|---|---|
| C$5.05 (Monday’s close, pre-results) | 85% | C$1.93 | -27.7% |
| C$4.75 (the September 18 low close) | 87% | C$2.23 | -31.9% |
| C$4.50 (below the 52-week low close) | 88% | C$2.48 | -35.5% |
| C$4.25 (a harder break) | 89% | C$2.73 | -39.1% |
The answer barely moves. Across break prices from C$5.05 down to C$4.25, the implied probability sits between 85% and 89%, so the market’s view is not especially sensitive to how badly the stock would fall.
Two things have to be said about that number, and they are the same point from two sides. First, the calculation sets the required return to zero: it assumes a holder hands over today’s price for a payout months away and asks nothing for the time or the capital. Discount the payout at any positive required return and the implied probability rises: 95% at a 10% required return over four months, and at a 15% required return over the same span it reaches 100%, meaning the spread compensates for nothing at that hurdle. So 85% to 89% is a floor rather than an estimate. What the pin means is not that a mid-teens return is unavailable, because on a December or January close the annualised figures below clear that comfortably. It means that at a mid-teens hurdle the price already assumes the deal closes, so nothing is left over as compensation for it not closing. Second, the C$0.3374 being converted into odds here is the identical C$0.3374 annualised in the next section. One reading treats the whole of it as compensation for deal risk, the other treats the whole of it as payment for waiting. They are two lenses on one quantity, not two findings, and a reader who adds them together has counted the same money twice.
It also sets the shape of the trade-off plainly. The upside from here if everything goes right is C$0.3374 a share. The downside if it does not is C$1.93 to C$2.73, or 27.7% to 39.1%, which is one unit of reward against 5.7 to 8.1 of risk. That ratio is not evidence the spread is unattractive. It is what an 85% to 89% implied probability means: at 85%, 0.851 times C$0.3374 minus 0.149 times C$1.93 comes to zero, so the two sides are the same number by construction. The ratio describes the price and nothing beyond it.
What the wait pays if it closes
That 4.83% is a total return, not an annual one, and what it is worth turns on the calendar. Our arithmetic, running from September 29, on both the compound method and the simple one:
| Deal closes | Days | Compound | Simple |
|---|---|---|---|
| December 31, 2026 | 93 | 20.4% | 19.0% |
| January 31, 2027 | 124 | 14.9% | 14.2% |
| February 28, 2027 | 152 | 12.0% | 11.6% |
| March 31, 2027 | 183 | 9.9% | 9.6% |
Compound annualisation is (1+r)^(365/days) minus 1, and it assumes the proceeds get redeployed at the same rate for the rest of the year, which a one-off merger spread does not offer. The simple column, r times 365 divided by days, is the plainer read. Every row assumes the deal closes.
The release guides to closing “no later than early 2027”, assuming what it calls “the timely receipt of all required approvals”, which points at the December and January rows. The release draws no sharper line than that, so the later rows are there to show what slippage costs rather than to be ruled out.
Currency is the part nobody prices
At Tuesday’s close, 95.5% of the payout is US dollars, and the stub is a Nasdaq-listed share, so effectively the whole claim is a US-dollar one. A Canadian holder is short the loonie until closing, and the roughly 4.5% arriving as BRC stock stays a US-dollar asset afterwards, so the currency question does not end when the deal does. Our arithmetic on the same US$5.1595:
| USD/CAD at closing | Payout | vs C$6.98 today |
|---|---|---|
| 1.30 | C$6.71 | -3.9% |
| 1.35 | C$6.97 | -0.2% |
| 1.40 | C$7.22 | +3.5% |
| 1.4182 (Tuesday) | C$7.32 | +4.8% |
| 1.45 | C$7.48 | +7.2% |
| 1.50 | C$7.74 | +10.9% |
The breakeven is USD/CAD 1.3528. At that rate the payout is worth exactly today’s C$6.98, and below it a Canadian holder collects less than the stock is worth today even if the deal closes on schedule. That breakeven is not an accident of where the rate happens to sit. Because the payout is a US-dollar sum converted at whatever rate prevails on the day, the currency decline that would erase the spread is exactly the size of the spread: both are 4.61%, the same expression written two ways. That puts the same 4.61% to work twice: it is the entire compensation for deal risk and the entire buffer against a falling US dollar, and a holder is paid for only one of those jobs.
There is a tax version of the same problem outside a registered account. The proceeds arrive in US dollars and the stub is a US-listed share, so a non-registered holder converts at the closing-day rate while their cost base was fixed at the rate on the day they bought. Our guide to adjusted cost base works through that two-rate trap, and notes that inside a TFSA, RRSP or FHSA none of it applies. That is a complication of holding on rather than an argument against it: selling on the TSX today is a disposition too, so a non-registered holder triggers the same disposition either way and the choice between the two paths turns on the timing and the currency, not on whether tax applies at all.
What has to happen before anyone is paid
The deal is a plan of arrangement under the Business Corporations Act (Ontario). It needs two approvals at a special meeting: at least two-thirds of the votes cast, and a simple majority of the votes cast excluding votes required to be excluded under Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions. Officers and directors holding about 27% of the shares have signed voting support agreements. The majority-of-the-minority test is the one whose outcome cannot yet be assessed, because which holders count inside the minority is set by the management information circular. That document has not been mailed, and it is the first thing to read when it arrives. Court and regulatory approvals and customary closing conditions also apply. That list is what the 4.61% discount is paying for: an unmailed circular, a minority test whose electorate is not yet defined, a court hearing still to come, and a company whose reporting system produced a correction to three quarters of revenue, disclosed in the same release that announced the deal.
On the money, the release states that “The Transaction is not subject to any financing condition”, which allocates that legal risk to BRC rather than describing where the funds come from. For scale, BRC’s market capitalisation at Tuesday’s close was about US$198 million, on 40,199,755 shares at US$4.92, against the US$170 million of cash and US$10 million of stock it has agreed to deliver. The terms that govern the money and the clock, the outside date, any reverse termination fee and the financing arrangements, are in the arrangement agreement, which gets filed on SEDAR+ and on EDGAR.
The agreement carries a termination fee of US$5,397,000, payable if Sangoma uses its fiduciary out to accept an unsolicited superior proposal that BRC declines to match. On our arithmetic that is 3.00% of the US$180 million of equity consideration and 2.65% of enterprise value. ATB Cormark Capital Markets gave a verbal fairness opinion to the Special Committee and the Board, which unanimously recommends the deal after a strategic review running since May 2026.
A 47% premium that still lands below November 2025
Sangoma’s 52-week intraday high is C$7.62, set November 27, 2025, and its highest close in that window is C$7.53 on November 12, 2025. The C$7.40 deal value is 1.7% below that highest close and 2.9% below the intraday high, so holders are being taken out under where the stock finished less than eleven months ago, and Tuesday’s C$7.09 session high is still short of the 52-week high. The premium is real all the same, because of where the stock had fallen to: the 52-week lowest close is C$4.75 on September 18, 2026, and the intraday low is C$4.71 on May 14, 2026. Marked to Tuesday’s close the payout is still a 44.9% premium to Monday’s C$5.05, against the 47% the release quoted. Most of that premium was taken in Tuesday’s session: a buyer at C$6.98 has 4.83% left.
If you already hold Sangoma, the question is a different one from the spread buyer’s: sell into Tuesday’s close, or wait for the payout. Everything above is the input to that decision. An implied probability of closing with a floor around 85% to 89%, C$0.3374 of upside against C$1.93 to C$2.73 of downside, a currency breakeven the same size as the spread, and a circular that has not been mailed. Which side of it a holder lands on turns on their own tolerance for the wait and for the two ways it can go wrong.
Disclaimer: The content on bestcanadianstocks.ca is for informational and entertainment purposes only and does not constitute financial advice. Past performance is not indicative of future results. Always consult a qualified financial advisor before making investment decisions. Transaction terms are Sangoma’s own, from the arrangement-agreement release of September 28, 2026 carried in Press-Release-F26Q4-With-Separate-Transaction-Release.pdf on sangoma.com, and the revision of previously reported quarterly figures is from the fourth-quarter and fiscal 2026 results release of the same date. Sangoma reports in US dollars; the shares trade in Canadian dollars on the TSX as STC and in US dollars on Nasdaq as SANG, and the consideration is denominated in US dollars. Share prices, volumes, share counts and the exchange rate are Yahoo Finance, and closing prices for September 29, 2026 are used throughout. Figures identified in the text as our arithmetic are ours: the implied BRC reference price, the consideration remarked at BRC’s closing price and at the closing exchange rate, the decomposition of the gap, the implied probabilities of closing and the break-price range they rest on, the annualisations on both the compound and simple methods, the exchange-rate sensitivity and its breakeven, the market capitalisations, and the termination fee as a percentage of the equity consideration and of enterprise value. The break prices in the probability table are assumptions chosen to bracket a range, not estimates of where the stock would trade.
