HIG Capital saves Xtera from bankruptcy
21 Mar 2017
Region: Europe (UK), North America (USA), Topic: Corporate, Market & Product: Communications (Submarine Telcoms Cable)
Optical transport solutions provider, Xtera Communications, has been bought by HIG Capital, a global private equity investment firm as part of Chapter 11 bankruptcy proceedings.
HIG has acquired all the assets of Xtera Communications, previously providing debtor-in-possession financing to the Xtera debtors in connection with the Chapter 11 case. Xtera filed for Chapter 11 protection in November 2016, saying that an initial public offering in March failed to generate the required cash infusion. This led to liquidity problems that caused the company to default on payments of its pre-petition secured debt. In January 2017 Xtera cancelled the scheduled Chapter 11 auction, as it had received no bids by the deadline, and went instead with HIG, the stalking horse bidder as the proposed buyer.
Previous investments in fibre optics
HIG was in the news recently having sold its stake in UK-based speciality fibre optic producer, Fibercore, to Humanetics, a global supplier of precision test systems and sensor solutions. Under HIG's ownership, Fibrecore grew from a niche producer into a leading provider of optical fibre to a range of high-tech industries. HIG acquired Fibrecore from Cisco, in a carve-out transaction back in 2011.
Carl Harring, managing director at HIG commented, "We believe Xtera has considerable growth potential as an independent, well-funded business with a new ownership structure. Its world-class IP protected technology is not only differentiated and superior to that of its competitors, but it is delivered to an impressive range of global clients at a cost-effective price point.
"Our immediate focus will be to work with them to deliver and build on existing contracts and over the long-term, provide the financial support to enable the company to fully capitalise on its technology with a broader base of customers."
Established in 1998 and based in the UK (Harold Wood, Essex) and the US (Allen, Texas), Xtera supplies un-repeatered and repeatered sub-sea systems, using high performance optical amplifiers to carry data. Under HIG's ownership, Xtera's management and technical team will remain at the helm of the business, to execute key existing customer contracts and expand the business in the rapidly-growing markets it serves with plans for new product launches.
Stuart Barnes, founder of Xtera, added, "We are delighted to announce our new partnership with HIG, which has previously invested in the fibre-optics sector and has a proven understanding of how to grow specialist industrial suppliers into market-leading players. We share the same vision of strengthening Xtera's footprint in the future."
New leadership team
As part of the acquisition, Xtera said that it now has a new leadership team. Dr. Stuart Barnes, founder, chairman and chief strategy officer announced the following appointments: Douglas Umbers, CEO; Keith Henderson, founder and COO; Robert Richardson, founder and chief sales officer and JayeshPankhania, CFO. The new executive team is supported by Xtera's highly experienced senior management, including recently appointed chief technology officer, Tony Frisch, and senior VP Turnkey Systems, Joerg Schwartz.
Barnes, Umbers and Pankhania are based in Xtera's Harold Wood office near London. Henderson is based in Allen, Texas near Dallas, and Richardson is based in Peachtree Corners, Georgia, near Atlanta.
Contributor:
Natalie Noor- Drugan, Publisher & Editor in Chief, Wire & Cable News