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Mako Networks sold to US provider

07 Oct 2015

United States telecommunications service provider D&S Communications has acquired the assets of Mako Networks from the company’s receivers for around $3 million.

D&S Communications was Mako's primary North American distributor. The company has been providing communications to small, medium and Fortune 500 customers in North America for more than 27 years and offers a range of services including hosted and on-premise based VoIP solutions, carrier services, customised management portals and hardware.

The company has acquired the rights to all intellectual property relating to Mako’s branded network appliances and cloud-based Central Management System, including patents and patent applications, its trademarks and its beneficial interest in any contracts signed with customers worldwide. Spark New Zealand retains the rights to the Secure Me product in New Zealand.

D&S says it will continue to base research and development and compliance in New Zealand and will retain several of Mako's senior managers, including company founders Chris Massam and Simon Gamble.

D&S says it will also hire core members of the R&D team and will look to hire further R&D staff in New Zealand to continue product development and enhancement.

Mako Networks went into receivership and liquidation in August, with liabilities totalling more than $30 million and an estimated deficit of $25 million expected. 

The US company has been an implementation and logistics partner for Mako in the United States since 2014, handling the installation of more than 4000 Mako network devices for Chevron. In 2015 D&S became Mako's primary North American distribution partner assisting Mako with marketing, sales and implementation of its PCI DSS compliance solutions.

Jason Kubasak, D&S Communications chief executive says the decision to acquire Mako’s assets was the result of a good understanding of Mako’s technology and global potential.

“In working with Mako over the last two years we’ve come to respect the technology and the deep knowledge the team has about keeping networks secure and have an extremely high regard for their unique and highly robust approach to network security and compliance. Given our history with Mako, we’re a natural fit as a purchaser.”

He says that D&S had committed to Mako when it became a distribution partner and had protected its investment from the outset.

“We were made aware of the company’s financial position when we undertook due diligence and developed a business continuity plan in the event of an insolvency," Kubasak says.

"When that plan was triggered we considered our options and decided that, rather than merely exercising our right to continue to provide products and support in North America, we would invest further in the business and seek to acquire the assets in their entirety.

“The team has developed some outstanding technologies which have proven their worth in the course of rigorous assessments by large enterprises, including Chevron," he says.

"We believe there’s an opportunity to build on this foundation and build a network security company that can succeed in global markets.”

D&S expects to restructure the assets and acquired companies over the next few weeks, to better enable it to continue to deliver products and provide support to distribution partners and enterprise customers.

When the restructuring is completed the company will operate wholly owned trading subsidiaries in each of its four territories: Mako Networks New Zealand, Mako Networks Australia, Mako Networks UK and Mako Networks USA.

Mako Networks shareholders placed the company into liquidation on 20 August, and the following day Spark New Zealand, which is a secured creditor, appointed KordaMentha as receivers for the company.

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