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Exalt CEO: Company Lives On Following Management Buyout

Dan Jones
9/29/2014
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Microwave backhaul systems vendor Exalt Communications has not shut down, it just shuttered its HQ for a short period while it undertook a management buyout, according to its CEO.

Light Reading heard from sources on September 22 that the company had shut down. One source had even been past the Campbell, Calif. headquarters and said it appeared to be closed. (See Exclusive: Microwave Maven Exalt Is Cooked.)

That is not the case, Exalt Communications Inc. CEO Amir Zoufonoun told Light Reading on Friday; rather, the office was shut for a 10-day period while the buyout was being sorted out. It is now open again.

"As of a few days ago, we're cranking the machine again," Zoufonoun says. He adds that the company had a record sales day on Wednesday.

Exalt is a privately held company that started in 2004 and has been venture capital backed for most of its existence by Fuse Capital, Trinity Ventures and InterWest Partners . The company pulled in about $30 million in funding, with the last injection being a series C in 2009. (See Exalt Raises $15M.)

"We were at the end of the line with regard to funding," Zonfonoun explained. The VC backers, however, offered the management the opportunity to buy out the company.

"We were motivated to continue," the CEO says. Sorting out the nuts and bolts of the buyout meant that business didn't quite continue as usual for the moment. "We never stopped anything but certain things slowed down," Zoufonoun says.

The "sorting out" included some staffing changes, Zoufonoun says: "Some people get off the bus, some people get on." But the CEO says that he has the core team he wants with the company.

Zoufonoun wouldn't disclose how many employees the company currently has. The CEO also won't talk about the company's financials or how the buyout deal was structured. Zoufonoun notes that Exalt has never revealed employee numbers and financial details, even when briefing analysts, since its inception as a company.

He also thinks a focus on the Campbell HQ may be misleading, since the company has been shifting more employees and R&D to less expensive places. "It's too big for us," Zoufonoun says of the HQ and says that the company is actively looking for a smaller building in the same area.


Read more on mobile backhaul by visiting Light Reading's dedicated channel.


"As related to the Campbell office, we have been on a quest to reduce and limit the HQ expenses over the past three years," the CEO writes in an email to Light Reading. "In fact, we have hired more people in our other locations outside the HQ office over the past three years and have generally shifted the focus of hiring to lower cost locations."

The microwave backhaul business is certainly a challenging one, the CEO admits, especially with the entry of Huawei Technologies Co. Ltd. into the market. Nonethless, he claims that the new G2 licensed microwave radio is "an absolute killer" for Exalt that has been winning customers for the firm. "Our competitors hate that radio," he says.

The company had also been silent on the social media and press release front for several months, but Zoufonoun says that will soon change, with customer announcements coming in a few weeks.

"We also have a very rich roadmap of new products that will be announced starting Q1," the CEO writes in an email.

— Dan Jones, Mobile Editor, Light Reading

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billsblots
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billsblots,
User Rank: Moderator
10/16/2014 | 5:01:40 PM
Re: Shutters up!
I used to get monthly newsletters from them about field cases where their equipment had been sold.  It's a cutthroat market and usually very difficult to differentiate any discernible difference or advantage between competing companies.
Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
9/29/2014 | 12:36:00 PM
Re: Shutters up!
I question when their last sale was and how much revenue they're bringing in. That's the true measure of whether a company is still in business. 

I'm skeptical. 
brooks7
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brooks7,
User Rank: Light Sabre
9/29/2014 | 9:08:04 AM
Re: Shutters up!
Ray,

Essentially it sounds like a bit of BS over the reality,

You shutter things because you have no money to run the business.  Then you probably did an asset sale.  Normally a MBO happens for an ongoing operation.  The question to ask would be, "What happened to customers while your HQ was shuttered.  Could they receive support?"

Sounds like things are really disrupted as they reorganize and will likely have to raise new funding.  If management is so well off, while the company went essentially out of business you have to question some things.

seven

 
Ray@LR
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[email protected],
User Rank: Blogger
9/29/2014 | 7:42:52 AM
Shutters up!
The company closed its headquarters while it undertook a management buyout???

I have never run a business so I don't know if this might be considered a 'regular' move, but wold that include not having anyone answering the phones or having anyone on the premises?

I'm not suggesting this did not happen - I'm just asking how unusual this might be, especially just prior to a "record sales day". 
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