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VoIP Systems

NexTone Chief: We're Not in Play

CHICAGO -- NXTcomm -- NexTone Communications Inc. 's new boss says rumors of his company's demise are unfounded.

It took some doing, but we finally managed to get comment from NexTone on speculation that the company might be for sale following the resignation of two top officers Monday evening. After the show floor closed Tuesday, Light Reading had a conversation with new executive chairman David Walsh, who was adamant that the VOIP specialist was not looking to be bought out. (See NexTone Nixes Management and NexTone Names Chair.)

Walsh says that with the backing of One Equity Partners -- JP.MorganChase 's private equity arm, at which he is a partner -- the company doesn't need to look for an exit right now. In fact, he says, "We've already passed on some offers."

As for going public, Walsh dismissed speculation that the management change came because former CEO Malik Khan had not taken the firm public as quickly as some of its rivals.

In fact, Walsh says just the opposite is true, and that NexTone had been approached by Wall Street firms to IPO, but the board had decided against it -- for now. Still, he says, NexTone is "preparing for it, so that if we do decide to go public, we can."

In the meantime, he thinks there is still a "huge amount of value to be created" at the company, and that the board is "thinking about the long term, what's right for the company."

According to Walsh, it was the strategic direction of the company that caused Khan to step down from his role as CEO. Walsh intimated that Khan may have been looking for an exit, either through an IPO or a buyout, while the board disagreed with the timing of such an action. {Ed. note: Khan may also have been simply too wrathful.]

"Malik did a great job," Walsh said, but the board believed he might not be the best leader for the next phase of the company's history. According to Walsh, the board believed NexTone leadership "had to be doing things [Khan] was not comfortable with or not necessarily good at."

Seamus Hourihan, vice president of marketing and product management at Acme Packet Inc. (Nasdaq: APKT), remained ever skeptical of the direction his competitor is taking. Speaking about the NexTone management shakeup Tuesday night, Hourihan said, "If I were a NexTone customer, I would be concerned right now."

NexTone vice president of marketing John Longo remained unmoved about concerns that his company might be in trouble. "Some others might like to paint us that way, but nothing could be further from the truth," Longo said.

— Ryan Lawler, Reporter, Light Reading

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