Coms: Yes, we DID appoint advisors to flog off our voice biz
Crystal ball not cracked, insists irritated firm
Troubled London-listed Coms plc has publicly stated it is working with a business advisor to carve off part of its operation, following an El Chan report that it called upon Knight Corporate Finance (KCF) to sell its voice division.
As revealed by us on Friday, Paul Billingham, founder and joint partner at KCF, was told to get shot of the telco arm in a fortnight.
Though Coms was quiet before we revealed their plans, the firm found its voice afterwards:
The company has in recent months received a number of expressions of interest concerning various group businesses. The board has appointed an advisor to assist in evaluating its business opportunities.
The process “may or may not result in the disposal of one or more of the group’s businesses,” the statement added.
The statement suggests the appointment is part of an ordered plan and not a panicky response to a restructuring plan that didn’t yield expected savings, amid the exit under a cloud of former CEO David Breith last month.
El Chan understands KCF will look to wrap up the sale of the loss-making voice unit early next month, leaving it with an infrastructure and support services operation.
The telco arm employed around 90 heads at the start of this year who sell and support voice, maintenance, hosted services and mobile, but job cuts are expected to take this nearer to 60 for any new owner.
The customer base is understood to stretch into the thousands and annual revenues are believed to be between £10m to £15m.
The M&A strategy at Coms lacked coherence, said Philip Carse, partner and principal analyst at Megabuyte.
“Buying both a low margin cabling business that Redstone was glad to get shot of and a distressed buy and build (Actimax) was a disaster waiting to happen.
“The irony is that the voice business is probably the most sensible, profitable and cash generative bit of Coms today; selling it will release emergency funding, but also raises the question of how long the remaining business can limp along for,” he added in a research note today. ®