Sarcom Hires New CEO

Financially struggling solution provider Sarcom last week named Jeff Sturgeon its new CEO.

Sturgeon replaces Randy Wilcox, a board member and company founder who was serving as acting CEO after former CEO Rick Mills left in August following a management shakeup.

Sturgeon was most recently vice president of technical sales and consulting at WorldCom, where he worked for seven years. He also held senior management positions at Uunet, CompuServe Network Services and Emerson, according to Columbus-based Sarcom.

New CEO Jeff Sturgeon has held positions at WorldCom, Uunet and CompuServe.

In addition, Sarcom has completed the conversion of $102 million in long-term debt to common stock in the company.

The debt-to-equity conversion was led by France's Banque Nationale de Paris and a group of shareholders, according to Sarcom.

Banque Nationale de Paris becomes the majority owner of the company, but Wilcox would not detail the percentage of ownership. "It's a nice situation. The board runs the company through the management team. The bank is not involved at all [in operations]," he said.

Sarcom piled up more than $100 million in debt through a series of acquisitions from 1996 to 1999 that did not provide a return on the investment, according to Scott Berding, formerly Sarcom's vice president of sales.

In an interview with CRN last August, Wilcox said, "Did [the acquisitions] all work out? No, of course not. But some of our best locations and largest customers were part of those acquisitions."

Sarcom currently has a small amount of debt following the debt-to-equity conversion, Wilcox said.

"But we have a great balance sheet and tangible net worth now," Wilcox said. "This really positions us for the future financially."

Sarcom now has 1,500 employees, down from a peak of about 2,700 in 1999, Wilcox said. He would not provide revenue figures for the privately held solution provider.

The company has shifted toward more of a services-oriented business model, Wilcox said. "We do life-cycle management of the desktop, helping customers figure out what they need, as well as procurement and disposal," he said. "Second is network services, and third is design technology to meet business objectives. For example, we do quite a bit in security consulting."

Sarcom still serves the Fortune 500, but most of its new business comes from the midmarket, Wilcox said.

"Our top 30 customers from five years ago are still on our customer list," he said. "We're not de-emphasizing big customers, but we're picking up a lot of other customers."

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