Redknee to spend $100m in rescue bid

By:
Alan Burkitt-Gray
Published on:

Interim CEO of Redknee says she will spend $100m on R&D and hire 200 top sales people

The new CEO Redknee, the troubled Canadian telecoms software company, has announced plans to spend $100 million on R&D over the next three years and to hire 200 senior sales people as part of her rescue attempt.

Danielle Royston, hired last month as interim CEO when Lucas Skoczkowski was fired from the job, gave details of the plan in a conference call this morning.

Skoczkowski remained on the board until 14 March, three weeks after he sold 2.15 million shares in the company during a blackout period, when directors and senior management were banned from trading in Redknee shares.

Royston, who was brought in as a turnaround specialist, said that she wants to invest “in staffing a series of cross-functional strategic account teams to drive customer success with key accounts. Redknee expects that these teams will constitute 200 people in aggregate, most of whom are not currently with the company.”

The R&D programme will seek “to close product gaps associated with customer success issues”.

The strategy is taken from ESW Capital, a private equity investor which bought $83 million worth of Redknee stock in January. Redknee said: “In the ESW Capital model, long-term business health is predicated on most, if not all, of the installed base, as measured by revenue, indicating that their relationship with and investment in Redknee generates a positive return. Achieving this success level is critical to the model as it enables both installed base growth and creates a foundation to ultimately enable profitable new customer acquisition.”

In February Royston said Redknee would focus on strategic global accounts in the telecoms industry as well as pre-integrated telecoms software solutions, delivered on operators’ premises or from the cloud. Redknee will wind down operations outside telecoms, she said. She appointed a managing director of strategic accounts in mid-March.