Polycom's plan to divest its wireless phone systems business to an affiliate of Sun Capital Partners is apparently on the rocks.
The phone and video systems company said it plans to file a lawsuit in Delaware Chancery Court and will "zealously pursue all appropriate recourse and will seek expedited treatment of this matter with the goal of reaching resolution in 2012."
Polycom made the statement in a Form 8-K filing with the U.S. Securities and Exchange Commission dated August 21. It provides no further details about what is affecting the deal, which Polycom announced in mid-May and was supposed to close in the third quarter.
Under the terms provided at that time, Sun Capital agreed to pay about $110 million in cash for the Polycom wireless handset unit, which includes the Wi-Fi and DECT handsets Polycom sold under the SpectraLink and KIRK brands, among others.
The business, according to Polycom, yielded about $94 million in revenue for calendar 2011 -- a fraction of Polycom's 2011 revenue of $1.5 billion. The $110 million figure is also about half of the $220 million paid by Polycom to acquire SpectraLink five years ago.
Polycom did not respond to a request for comment by CRN. Sun Capital told several outlets, including Bloomberg Businessweek, that it would not comment on pending litigation but has "acted, and continue to act, in good faith in this matter."
Polycom has sought to reposition its branding and corporate strategy around software, aggressively developing businesses such as video content management and mobile UC that support its bread-and-butter IP communications systems. It has also stepped up partnerships with the likes of Microsoft, HP and Juniper to combat both Cisco, the dominant vendor in the enterprise video space, and a legion of smaller videoconferencing companies trying to wrest customers away with cheaper video alternatives.
PUBLISHED AUG. 23, 2012