M/A-COM Wireless Systems makes changes as it absorbs Com-Net Ericsson
M/A-COM quietly became North America’s second-largest two-way radio communications system and equipment manufacturer on May 14 when, without public announcement, it took possession of the assets of Pittsburgh-based Com-Net, including Com-Net’s subsidiary, Com-Net Ericsson Critical Radio Systems.
Tyco Electronics, Harrisburg, PA, acquired Com-Net and placed the business under the administration of the Wireless Systems Division of its M/A-COM subsidiary. Tyco Electronics is owned by Tyco International, Pembroke, Bermuda, a company with $30 billion in sales last year and 205,000 employees.
The value of the Com-Net transaction was not disclosed. The smallest transaction Tyco has disclosed in recent months is its May 3 purchase of Scott Technologies, Beachwood, OH. Scott Technologies, a manufacturer of respiratory protection systems and gas detection products with annual sales of $260 million, was purchased for about $400 million worth of Tyco stock.
Com-Net’s annual revenue is estimated at $300 million, but the purchase price wouldn’t necessarily be comparable to that of Scott Technologies. Among other factors, profitability, growth and liabilities affect valuation, so companies with comparable revenue might sell for widely differing sums.
L. Dennis Kozlowski runs Tyco International as chairman and chief executive officer from his office in Exeter, NH. W. Juergen Gromer heads Tyco Electronics as president. Rick Hess, president of M/A-COM, Lowell, MA, oversees the company’s four divisions: Semiconductors, Components, Aerospace and Defense, and Wireless Systems.
John Vaughan, M/A-COM’s vice president of business development, has additional responsibility as the head of the Wireless Systems Division. He is the executive in charge of the land mobile radio business.
M/A-COM acquired facilities in Lynchburg, VA, that include research, engineering, manufacturing, sales and distribution operations. Managing the Lynchburg operations for the Wireless Systems Division is General Manager Chuck Shaughnessy.
Com-Net’s chief executive officer, Steve Savor, set his course on the exit when he sealed the deal with Tyco. When the transaction closed, he returned to his former employer, Pittsburgh-based Anderson Group, an investment company, as its chief executive.
Three members of the Anderson Group, William Anderson, Stephen C. Frobouck and Savor were the founders of Com-Net. As Com-Net grew a wireless communications tower construction and leasing business, Frobouck developed a radio communications business called Com-Net Professional Mobile Radio to emulate the business model of tower owning and leasing in the public safety radio communications segment. The partners leapfrogged a lengthy development phase with last year’s purchase of Ericsson Private Radio Systems, using financial backing from the Anderson Group, American Tower and others.
Com-Net Ericsson executives and employees were seen taking boxfuls of personal property out to the parking lots at the company’s Lynchburg facilities on May 15. They had been let go in a layoff affecting as many as 10 of the company’s 12 executives and about 10% of the estimated 650 employees.
Among the key former Com-Net Ericsson managers who remain with M/A-COM Wireless Systems are Shaughnessy, Chief Technical Officer Ernest Hofmeister and Director of Products Steve Frackleton. Com-Net Ericsson’s heads of North American sales, international sales, market development, finance, human resources, utility markets, public safety markets and political affairs were let go.
Hefty changes in executive management come easily to Tyco International’s chief, Dennis Kozlowski, who more often than not replaces the chief executive and most of the management of acquired companies. When Tyco International bought AMP (since renamed Tyco Electronics),Kozlowski replaced AMP’s chief executive, Robert Riff, with Gromer, who had been AMP’s head of sales. Within two days, 60 of 66 vice presidents were fired.