VCEDA: Sykes acquisition of Frontier Secure will not affect VCEDA loan payment
Photo above: Officials with Frontier Secure, the Wise County IDA and the Virginia Coalfields Economic Development Authority pose with a $5.6 million check last June in Wise. Photo by Tim Cox Photo/Graphics
By Scott Robertson
Sykes Enterprises acquisition of Frontier Secure, formerly a division of Frontier Communications, will not affect the repayment of the $5.6 million Virginia Coalfield Economic Development Authority loan that had paved the way for Frontier Secure to open its Wise, Va., call center last year, according to VCEDA’s executive director.
“This doesn’t change the conditions on the loan,” Jonathan Belcher told The Business Journal. It’s repaid in essence through the rent payments the company makes to the (Wise County) IDA. That part of it is still the same. It’s just substituting Sykes for Frontier.” The payments the company makes to the IDA will then be sent on to VCEDA.
While Sykes did not name Frontier Secure in its release June 1, it said, “it has completed the acquisition of the certain assets of the telecommunications services provider.” Two sources with knowledge of the deal confirmed to The Business Journal in May that Frontier Secure was the target of an acquisition bid by Sykes.
In addition, statements by SYKES CFO John Chapman pointed to Frontier Secure as the acquired party. “We get ready-made revenues and delivery infrastructure across four sites with both existing and new strategic clients, that span the financial services and technology verticals,” Chapman says.
In May, help wanted ads for the Frontier Secure locations in Deland, Fla., Lindon and Provo, Utah and Wise all ended with the disclaimer, “This position will be transferring from Frontier to SYKES Enterprises, Inc. on June 1, 2017.” On June 2, those ads were replaced with the statement,” We apologize for the inconvenience, but this position’s status has recently changed. Please select another position to apply to.” At the same time, Sykes had added Deland, Linden, Provo and Wise to its online list of sites.
In a May 8 press release announcing Sykes’ Q1 financial results, Sykes listed the purchase price of its April 24 acquisition at $7.5 million, which is slightly less than 10 percent of the revenue generated by those assets last year.