Kirk Telecom, one of the older players in the market and a firm favourite amongst many channel resellers has been sold to IP phone vendor SpectraLink for around $61 million.
Under the transaction, which is expected to close January 3, 2006, KIRK will become a SpectraLink company while continuing to do business under the KIRK name. SpectraLink obtained combined debt financing of $40 million in the form of a three-year term loan and revolving credit line. Those loans are secured by SpectraLink’s assets. The company will use a combination of debt and up to $30 million of its own cash to acquire all of the outstanding shares of KIRK. Management believes that this acquisition will be accretive to earnings in its first year.
In its last fiscal year ended April 30, 2005, KIRK had revenues of $35.9 million and net income of $2.7 million. KIRK scantel, a division that offers consumer-grade telephones in Scandinavia, will remain a wholly-owned subsidiary.
“With this acquisition, SpectraLink will have an unrivalled breadth and depth of expertise and products for workplace wireless telephony,” said John Elms, president and CEO of SpectraLink. “Adding DECT technology expands our market potential in the U.S. and KIRK telecom’s distribution channels provide additional reach overseas for our Wi-Fi products. The combined companies create a truly global organisation with significant distribution in more than 40 countries.”