Inter-Tel dips in Lake
Telco's technology is attractive springboard for Inter-Tel expansion
Telecoms manufacturer and interactive voice response (IVR) specialist Inter-Tel is acquiring Lake Communications, a Dublin-based maker of SME telephony systems.
Inter-Tel, a US firm with offices in the UK, will pay $28m, plus a $17.6m earn-out, for the firm, which sells in the UK through BT. It is expected the deal will take less than 60 days to complete.
"Lake's technology is core to Inter-Tel, and we like to own core technology," said Norman Stout, executive vice-president of strategy and acquisitions at Inter-Tel.
"Second, the people at Lake are fabulous. This gives us international expansion, especially into the UK and Europe."
Lake reported unaudited sales of about $31m, according to Inter-Tel. Of that, about $3m were sales to Inter-Tel's US operation.
Inter-Tel in the UK is believed to have "relatively modest" sales of $10m.
Lake is an OEM supplier to several service providers in Europe, including BT.
"Inter-Tel bought Lake because it consolidates its portfolio and it can now define the roadmap," said Matthew Ball, convergence telecoms research analyst at Canalys. "It also extends Inter-Tel's EU presence; it's a US-centric firm, with less than five per cent of its sales outside the US."
Ball added that Inter-Tel in the UK was selling Lake rival MDS's products, although Stout said the UK business has sold only "a little" MDS kit.
"Our plan is for Lake to continue to be run by (Lake managing director) Anthony Bermingham," Stout added. "We hope to be able to add our own core values, and be a larger company with deeper capital."
Ball sees the deal as part of an industry consolidation, pointing towards Avaya's purchase of Tenovis last year and EADS's anticipated take-over of Astra.