Lake acquisition boosts Inter-Tel’s revenues

29 Apr 2005

The acquisition of Irish networking firm Lake Communications for US$45m by Arizona telecoms giant Inter-Tel has resulted in an additional US$2.6m in first-quarter revenues for the Nasdaq-listed company, has learned.

In March Arizona-based Inter-Tel had executed an agreement closing the transaction for the purchase of 100pc of the issued share capital of Lake Communications and certain affiliated entities for approximately US$28m, plus an earn out of up to US$17.6m based upon certain targets relating to operating results for Lake Communications over the next 18 months. The transaction was completed after a 60-day closing period.

Dublin-based Lake Communications is a provider of small office converged communications solutions that include data router, firewall, business communication system and voice mail with auto attendant to the under-40 user market. The company designs and develops its products for sale through a distribution network of telecom operators and distributors in Europe and Australia, as well as the EncoreCX product currently being distributed by Inter-Tel in the US.

Lake Communications was established in 1991 following a management buyout by a team led by CEO Anthony Bermingham. The company quickly emerged to establish a worldwide reputation in the field of digital signal processor-based modem products geared to companies with up to 40 employees on specific local area networks. The Dublin company employs 100 people in Dublin, Cambridge, Sligo and Bristol.

This week Inter-Tel reported net sales for the first quarter increased 7.8pc to US$105.7m, compared with US$98m for the first quarter of 2004. The company said the sales increase included US$2.6m in additional revenues attributable to its acquisition of the entire share capital of Lake Communications. Excluding the acquisition sales would have been US$103.1m.

“We are very excited to have closed the Lake acquisition in March,” said Norman Stout, Inter-Tel’s chief strategy officer and chief administrative officer.

“The Lake Communications personnel is tremendous additions to Inter-Tel, as are its customers and products, and this acquisition will expand Inter-Tel’s international presence.”

By John Kennedy