Spectralink was founded in Boulder, CO and became the leader in wireless enterprise phones. That was pre-WiFi and VoIP. Their phones were integrated with and resold by most of the industry’s major system vendors. The firm was successfully transitioning its products to VoIP and Wi-Fi when Polycom acquired Spectralink for $220 million in 2007.
Polycom, already experiencing success with IP SoundPoint phones, saw wireless as a the logical second punch of its phone portfolio. It also acquired Kirk Telecom for $64 million, a Danish wireless phone maker that specialized in DECT technologies. The new Enterprise Wireless Voice Solutions group looked pretty capable. But things didn’t go as planned:
- The economy tanked in 2008.
- Polycom changed CEOs
- Smartphones took off
In 2011, Polycom closed the Boulder offices and consolidated staff in its existing Westminster, CO location. The facility in Denmark remained.
In 2011, the Enterprise Wireless division generated $94 million. Polycom announced intentions to sell-off the division to Sun Equities in 2012 for $110 million in cash. But that didn’t happen, in August, Polycom quietly revealed a lawsuit between the firms. Sun Capital failed to close because it claimed Polycom withheld material information. Specifically, Home Depot and Lowes, the division’s largest customers, dropped Polycom. Polycom insisted that wasn’t relevant.
In October, the companies reached a settlement and agreed on the previous $110 million price point. The payment terms were changed to $53 million in cash with the remaining $57 million to be paid as a four-year earn-out based on specified financial milestones. The closing of the deal was never announced by Polycom.
Here’s where things get hopeful.
The market is hot for mobility and wireless, yet the enterprise wireless phones have not kept-up with customer requirements. Sun to invest in the division now renamed to Spectralink. It also named Sten Dyrmose, from Kirk but in Colorado, the CEO.
The division had a few months at Polycom until it found facilities and is moving about 100 Colorado employees back to Boulder later this month to a 30,000 sqft facility. The new office will house R&D, Support, Marketing, and G&A functions.
The local paper quoted Dyrmose saying “We’ve been a sleeping beauty for five years. We never fit in Polycom and (Polycom) knew that … We’re almost grateful that Polycom let us go.” Dealers I’ve spoken to feel the same way. Polycom never managed to integrate its wired and wireless lines. The firm hasn’t made only a few changes and introductions to its wired lines, and largely ignored its wireless division. During this time wireless (especially Wi-Fi) exploded.
Sun Equities is based in Florida, and has investments in more than 315 mostly non-technical companies. They have big plans for Spetralink, including hiring some 50 people this year.
Welcome home Spectralink. Can’t wait to write about your next move – to a bigger facility.