Zenith Infotech Bond Negotiations Won’t Impact Zenith RMM
Zenith RMM is marching forward with its business and is not impacted by the alleged bond default at Zenith Infotech, according to Zenith RMM CEO Michael George (pictured), who says the two companies are completely separate businesses. Here’s the update, along with a look at where Zenith RMM is heading next.
Zenith Infotech spun off Zenith RMM in September. Also, Summit Partners, a private equity firm, funded the Zenith RMM spin-off. Around the same time, Zenith Infotech allegedly defaulted on a $33 million bond. This week, Zenith Infotech informed the India media that the company is negotiating with bondholders to work out a new payment schedule.
Meanwhile, Zenith RMM CEO Michael George continues to speak highly of Zenith Infotech as a partner, but George is drawing a clear line between the two companies. The alleged bond issue at Zenith Infotech “has absolutely no effect on us whatsoever,” said George. He described Zenith RMM’s launch as “essentially an acquisition [by Summit Partners]. It’s completed and [the deal] is closed. We are two completely separate companies, both in name and in legal definition.”
Looking Ahead: Zenith RMM
George and the Zenith RMM team are expected to share a roadmap with the company’s partner base starting in Q1 2012. The effort will include a multi-city tour. Also, Zenith RMM will continue to support Zenith Infotech’s backup and cloud offerings, but Zenith RMM intends to open up its platform to more companies. “Now that we are separate companies, we [Zenith RMM] will provide support for other third-party backup, disaster recovery and cloud products,” said George.
Zenith RMM is also making investments in its NOC (network operations center) business. The effort includes new linguistics specialists who will help the Zenith RMM NOC team to better serve partners.
Looking Ahead: Zenith Infotech
Meanwhile, I don’t have an official comment from Zenith Infotech about the alleged bond default and current negotiations with bondholders.
However, I witnessed a somewhat similar development while working for a major media company in the 1990s. At the time, the media company could no longer afford to pay its debt and therefore entered into negotiations with bondholders to set new terms. I’m not sugar coating the process — it can be stressful for employees, and customers certainly ask questions along the way. But the media company ultimately emerged stronger after the new debt terms were defined.
Of course, each situation is unique. MSPmentor will offer updates as news emerges. And we’ll also listen closely for continued trends involving Zenith Infotech’s SmartStyle cloud computing strategy.