Polycom Exits Wireless

This week, Sun Capital Partners announced that it completed the acquisition of Polycom's Enterprise Wireless Solutions group, which includes the SpectraLink and Kirk brands. The new company will now be called SpectraLink Corporation with Sten Dyrmose as the CEO. The new headquarters will be based in Colorado. SpectraLink Corporation will also retain its offices in Denmark.

Matthew Garff, Managing Director at Sun Capital Partners, praised SpectraLink and Kirk. He said that the two companies had a substantial market share and a comprehensive suite of products and services. "Given our experience with corporate carve-outs, we are excited to work with management to develop this standalone Company further and take advantage of strong projected market growth," Garff said of the new acquisition dubbed as "Company."

In 2007, Polycom acquired SpectraLink, a wireless handset company based in Boulder, Colorado, through a $220 million deal. SpectraLink was initially known for its line of in-building wireless phones. The company later ventured into Wi-Fi-enabled phones. Polycom acquired Kirk in 2005 for an estimated $62 million; many perceived that to be a premium price. Kirk is known for its line of DECT phones, which were more popular in Europe than in the U.S.

Last May, Polycom announced its intent to sell to sell its Enterprise Wireless Solutions division to Sun Capital for $110 million in cash. However, in August, Polycom revealed a lawsuit between the firms, as Sun Capital failed to close the transaction. Polycom stated in the SEC filing that it aimed "to zealously pursue all appropriate recourse and will seek expedited treatment of this matter with the goal of reaching resolution in 2012."

Sun Capital countersued, claiming that Polycom withheld material information--that of Home Depot and Lowes, the division's largest customers, had intended to switch to different technologies.

In October, the companies reached a settlement and agreed on the previous $110 million price point. However, the payment terms were modified to $53 million in cash with the remaining $57 million to be paid as a four-year earn-out based on specified financial milestones. Polycom has not issued a statement or release regarding the transaction, however dealers have been notified to direct their inquiries to the new company.

Polycom managed to miss most of the recent growth associated with both Wi-Fi and mobility. There were only a few product releases in the past few years, most notably the SpectraLink 8400 series of Wi-Fi phones. Polycom never converged the SpectraLink or Kirk brands, nor really integrated any of the phones with its prominent wired phones (SoundPoint or CX series). The SpectraLink 8400 did share some common tools with Polycom's VVX phones.

The wireless phones (both DECT and Wi-Fi) are commonly used in the verticals of healthcare, hospitality, manufacturing, retail, and warehouse operations.

Meanwhile, proponents of IP phones are optimistic that the new company, focused solely on wireless communications, will be good for the product line and the industry. There is very little information available at this time regarding any changes to products, distribution, or certifications.

Polycom is expected to focus on its offerings of video solutions and wired IP phones. Polycom's phones are used by many UC vendors, however, several alternative options exist. IP/SIP wireless phones are also available from Aastra, Ascom, Cisco, Panasonic, and snom. Also, Counterpath, along with most UC vendors, offers clients for smart mobile devices.

At this time, SpectraLink has no website, and SpectraLink.com still points to a Polycom website. Dealers were notified, by Polycom, that SpectraLink Customer Service and Support can be contacted via technicalsupport @SpectraLink.com. For additional information, please refer to this Polycom posted FAQ. (KOM)