What's Next for Genband?
Vogt left the company Tuesday to lead Harris Broadcast, leaving current chairman David Walsh to take over as CEO. (See Genband CEO Quits, Joins Harris Broadcast.)
Walsh is also the managing director of Genband's largest investor, One Equity Partners (OEP), which, according to industry chatter, now owns more than 90 percent of the privately held company. And while Genband was once hell-bent on an IPO, with Vogt gone and the company under OEP control, that prospect looks less likely or, at best, delayed.
OEP was the bankroll behind most of Genband's deals, including its acquisition of Nortel's assets and the merger with NextPoint Networks. And reportedly, the $343 million in funding Genband received from investors earlier this year was a result of the company taking the long-term debt put up by OEP for Nortel and converting it to a larger equity stake for OEP. (See Investors Back Genband's Vision.)
So, even if Genband does go public, OEP would get most of the proceeds back as reimbursement. It could sell off some parts of its business to recoup OEP's investment, but at least one industry analyst doesn't think that's likely. With the exception of Nortel's assets, Genband bought up failing businesses. It didn't pay all that much, so there might not be a lot of value left in selling them, the analyst says. (See Genband Bids $282M for Nortel's VoIP Unit and Genband Scores NextPoint.)
The analyst, who requested anonymity, also noted that Genband has been struggling with its legacy businesses since the VoIP equipment market is currently not that strong. "Carriers are cutting their legacy business spending, and that's where Genband plays," the analyst says.
What's more, with a lot of the products they own, they are under contractual obligations to support them. As such, Genband might be saddled with them for awhile.
"They have investor pressure to grow and crank more to the bottom line," the analyst says. "It's a tough spot. The way I look at them -- they are what they are. They'll have a hard time changing."
Under Walsh, more changes in management could be imminent if he decides to bring in new execs or Vogt recruits some to join him at Harris. The company isn't making moves yet, noting instead that it's well prepared to further grow the company, invest further and hire in strategic areas.
"Genband is profitable, growing and extremely well positioned as a leader in the IP communications world," a spokesman wrote in an email to Light Reading. "The team is focused on fueling exceptional market performance specifically with its next generation IMS, Session Border Control and Unified Communication solutions. David Walsh has made a long-term commitment to guiding Genband through its next chapter, which builds on the strategic role he's played at the company since he joined the board in 2008."
— Sarah Reedy, Senior Editor, Light Reading