WT Business Beat

By Nick Wakeman

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Nick Wakeman

MicroTech sells unified comm business unit

Corry Hong, the entrepreneur who acquired a distressed GTSI Corp. in 2012, is at it again.

This time, he’s bought the unified communications business from MicroTech, which has had its own troubles of late.

Terms of the June 30 deal were not disclosed, and Hong’s company, Unicom Global, didn’t disclose the name of the MicroTech business unit, but Unicom’s press release describes the business was founded as Sigcom in 2007.

MicroTech acquired Sigcom in 2008.

A source also told me that the business had about 60 employees and is based in Greensboro, N.C.

With the divestiture, MicroTech’s employee count drops to below 150, the source told me.

The thread that connects GTSI, MicroTech and Hong is that GTSI and MicroTech were both the subject of highly critical articles in the Washington Post. The articles led both companies to be proposed for debarment from government contracting, which effectively stopped them from winning new business.

It was particularly devastating to GTSI, which was a publicly traded company and saw its already low stock price drop even lower. To settle the government allegations, it had to drop its CEO and bring on new leadership, which sold the company to Hong.

The other connection between the two is that despite the seriousness of the allegations –primarily that the two companies were abusing small business set aside programs – neither company ever admitted to any wrongdoing, and the government never released any evidence that supported the allegations that led to the suspensions.

With the acquisition, Unicom picks up intellectual property around secure switching technology, an integration center and logistics center. The business unit also has a lab for design, test and integration of audio, video, voice and presentation technologies and a call center.

There is plenty left at MicroTech, which still has its substantial business with Microsoft and AT&T. It also has its NetCents II products and services contracts. It’s the only company that holds both. Cloud, cybersecurity and telecommunications offerings also remain with the company.

The deal likely gives MicroTech more financial resources to rebuild after the hit the company took after the Post allegation and subsequent SBA actions.

Hong is a serial acquirer. His company has closed four deals since the end of 2013, not counting the MicroTech unit.

So, I expect him to make more deals in the government market whenever the opportunity arises.

Posted by Nick Wakeman on Jul 02, 2014 at 9:25 AM

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