Telecommunications

Marco Buys S.D.-based TelServ Communications

St. Cloud-based Marco said the acquisition is part of its plans to expand nationally.

Marco, Inc., announced Wednesday that it has acquired TelServ Communications, Inc., a voice communications, data networking, and managed IT services provider based in Aberdeen, South Dakota.

Financial terms of the deal were not disclosed.

St. Cloud-based Marco, which has 465 employees at 22 offices throughout the Upper Midwest, will combine its Aberdeen office with TelServ’s operations. It plans to retain all of TelServ’s 13 employees.

Marco specializes in data networking and security, converged voice applications, print and document management, managed services, audio/video services, and video surveillance systems.

The company said that the acquisition—which is its ninth since 2007—is part of its plans for national expansion.

“This acquisition allows us to broaden our services in South Dakota and provide even more innovative technology services and support to our valued customers,” Marco CEO Jeff Gau said in a statement. “We’re excited to welcome the customers and staff of TelServ to our 100 percent employee-owned company.”

Established in 1973, Marco currently has offices in Minnesota, Wisconsin, North Dakota, South Dakota, and Iowa.

—Nataleeya Boss
([email protected])

Multiband to Acquire Competitor in $42.6M Deal

The New Hope-based provider of DirecTV, voice, and high-speed Internet services is buying New Jersey-based MDU Communications International, Inc.

Multiband Corporation said Tuesday that it is acquiring a New Jersey-based competitor, and the deal will significantly boost its customer base.

New Hope-based Multiband installs DirecTV, voice, and high-speed Internet services to residents in apartments and condominiums. It’s buying MDU Communications International, Inc., which also provides Internet and digital satellite television services to multi-dwelling units.

MDU Communications, which will become a subsidiary of Multiband, serves more than 75,000 subscribers. Multiband, meanwhile, serves about 116,000 subscribers in multi-unit properties.

Under the terms of the deal, MDU Communications’ stockholders will receive 0.759 shares of Multiband stock for each MDU share they own. The transaction, through which Multiband will assume $29.7 million in debt, is valued at about $42.6 million, the company said.

Shares of Multiband stock fell 6.7 percent Tuesday and closed at $2.21. They fell 5.4 percent and closed at $2.09 on Wednesday.

MDU Communications’ shares, meanwhile, climbed 71.6 percent and closed at $1.51 on Tuesday. They slid 7.3 percent Wednesday and closed at $1.40.

The planned acquisition comes about five months after a different Multiband deal fell through. The company last June signed a non-binding letter of intent to buy Exton, Pennsylvania-based WPCS International Incorporated for $3.20 per share—a deal valued at roughly $22 million. But the price of WPCS’ shares subsequently fell, and Multiband said in January that the transaction “is not viable” given “current market valuations.”

Multiband signed a definitive agreement for the acquisition of MDU Communications, and the boards of both companies have approved the deal. The transaction is subject to approval by MDU Communications’ shareholders and other closing conditions, and Multiband expects the deal to close during the fourth quarter of this year.

Multiband CEO James Mandel said in a statement that the acquisition is “a strategic opportunity that will be meaningfully and immediately accretive to our business.”

“The combined subscriber base will not only add scale to our support services, but will be an important growth center to achieve a higher penetration of multiple revenue streams, namely our push to deliver broadband and digital voice,” Mandel added.

MDU Communications CEO Sheldon Nelson said that the merger will give her company’s stockholders “shares of a strong, successful company with great potential for diversified growth.”

Multiband has roughly 3,700 employees in 33 states, and MDU Communications has 102 employees in 17 states.

Multiband is among Minnesota’s 60 largest public companies based on revenue, which totaled $300.2 million in 2011.

—Jake Anderson
([email protected])

Comcast to Lay Off 65 St. Paul Employees

Comcast, which last year announced plans to hire 600 call center workers in Minnetonka and St. Paul, is now cutting roughly 65 St. Paul employees as it shifts its “inbound sales” operations to Oregon.

Comcast Corporation plans to eliminate approximately 65 employees from its regional headquarters in St. Paul this summer.

Spokeswoman Mary Beth Schubert told Twin Cities Business on Thursday that the cuts will occur as Comcast transitions its “inbound sales” operations to a call center in Oregon. The transition will take place between the end of July and August 20.

The company’s inbound sales team is part of its call center staff that fields calls from prospective clients.

Despite the 65 job cuts, Philadelphia-based Comcast continues to grow its presence in the Twin Cities. The company last year announced plans to hire 450 people at a new call center in Minnetonka and an additional 150 for call center positions in St. Paul.

Schubert said that the company is still in the process of filling those positions, and “our hope is that the majority” of the employees being laid off in St. Paul “will find other positions within the company.”

Comcast outlined its layoff plans in a Wednesday letter addressed to St. Paul Mayor Chris Coleman and Ramsey County Board of Commissioners Chairman Rafael Ortega. The company said that if affected employees don’t transfer to other Comcast positions, they may be entitled to severance benefits.

Comcast currently employs roughly 2,000 people in the Twin Cities area.

—Jake Anderson
([email protected])

Verizon, Comcast Market Each Other’s Products in MN

The two companies have launched a joint advertising campaign, and they will market each other’s services from their respective Twin Cities stores.

Comcast and Verizon Wireless on Monday announced that they are teaming up to market each other’s services in the Twin Cities.

Dave Nyberg, Comcast’s senior manager of corporate affairs, said in a Tuesday phone interview that the intention of the partnership is to make it “as easy as possible” for customers of Comcast’s video, high-speed Internet, and landline phone services to also obtain mobile service from Verizon (and vice versa).

The two companies on Sunday launched a joint marketing campaign including print, radio, and television advertisements, Nyberg said. Information about Comcast’s services will be available at 23 Verizon Wireless stores located within Comcast’s cable footprint in the Twin Cities, and six local Comcast stores will provide information to customers regarding Verizon’s services.

If a Comcast customer inquires about Verizon services—either at a physical store or when speaking to a call center representative—Comcast will provide a phone number they can use to make an order, Nyberg said. Verizon, likewise, will provide its customers who inquire about Comcast’s services a phone number for obtaining those services. The companies are also marketing each other’s services on their respective websites.

Verizon and Comcast will also provide new offers and incentives to customers. For example, depending on the packages selected, Verizon and Comcast customers may qualify for prepaid Visa cards worth up to $300. Nyberg said that new customers who purchase services from both Comcast and Verizon may be eligible for the incentives, as well as existing customers; for instance, if a Comcast customer upgrades their services package and buys new services from Verizon, they may be eligible for a prepaid Visa card.

The marketing partnership gives both companies additional exposure, while providing a convenient way for customers to purchase in-home and mobile services, Nyberg added.

The two companies first joined forces earlier this year in Portland, Oregon; San Francisco; and Seattle.

Seamus Hyland, Verizon Wireless’ president for the Great Plains region, said in a statement that the companies’ joint marketing efforts in those markets have received “positive customer reviews.”

In addition to the Twin Cities, Comcast and Verizon are now rolling out their joint marketing effort in five other markets: Atlanta; Illinois/Northwest Indiana; Colorado; Kansas City, Missouri; and Salt Lake City.

“Because mobility is a top priority of the consumer, we co-developed an offering that provides a terrific wireless, entertainment, and communications experience in one spot,” Hyland said. “Comcast continues to deliver exceptional entertainment and communications services, and the Verizon Wireless 4G LTE network is the ideal complement to complete the package.”

—Jake Anderson
([email protected])

Best Buy to Cut 400 MN Jobs, Add 100 Mobile Stores

Through a major restructuring, the electronics retailer intends to reduce its corporate work force by about 8 percent and shutter 50 big-box stores this year. Meanwhile, it will add 100 new Best Buy Mobile stores in the United States and 50 new Five Star stores in China.

Best Buy Company, Inc., on Thursday announced plans to close 50 big-box stores, including an undisclosed number in the Twin Cities, and eliminate hundreds of jobs this year at its Richfield headquarters.

Best Buy also said it will modify some existing stores to feature its new “connected store” format, which includes an updated layout that is meant to attract attention to new products and offer a more hands-on shopping experience. The company plans to roll out the new concept in the Twin Cities by this fall and in San Antonio, Texas shortly thereafter.

During a Thursday conference call, CEO Brian Dunn declined to disclose the exact locations of the 50 U.S. big-box stores that will be shuttered, saying that the company first plans to contact affected employees. But Dunn did say that the new markets for Best Buy’s connected store formats—one of which is the Twin Cities—will experience store closures.

Best Buy spokeswoman Susan Busch said in an Thursday e-mail to Twin Cities Business that the 400 planned job cuts include both open and filled positions at the company’s Richfield headquarters; about 325 employees will lose their jobs, she said. The cuts represent about an 8 percent reduction in corporate jobs, of which there are currently 5,100.

The company is “committed to investing in strategic growth areas and will expect—despite the eliminations described today—to continue hiring to support those plans and critical business needs,” Busch said.

Best Buy expects the restructuring to result in $800 million in savings during the next three years, including $250 million in savings this year.

“We intend to invest some of these cost savings into offering new and improved customer experiences and competitive prices—which will help drive revenue,” Dunn said in a statement. “And, over time, we expect some of the savings will fall to the bottom line.”

Best Buy said it plans to emphasize “key growth initiatives,” including e-commerce. The company recently hired former Starbucks Chief Information Officer Stephen Gillett to oversee its digital operations, and it projects that domestic online sales will grow 15 percent this year.

Best Buy also intends to add 100 standalone Best Buy Mobile locations during the next fiscal year—and it expects to operate between 600 and 800 of those locations within about three years. It currently operates 305 Best Buy Mobile stores.

And the company plans to open 50 new Five Star stores in China this year, with a goal of having between 400 and 500 such stores in the next few years. Best Buy acquired the Five Store chain of appliance stores in 2009, and it currently operates 204 Five Star stores in China.

The Richfield-based electronics retailer announced its restructuring plans in conjunction with its fourth-quarter and full-year financial results. For the quarter that ended March 3, the company reported a net loss of $1.7 billion, or $4.89 per share—compared to net income of $651 million, or $1.62 per share, during the same period a year ago.

The quarter included $2.6 billion in charges primarily related to the company buying out the Carphone Warehouse Group’s stake in Best Buy’s U.S. mobile phone business, as well as the closing of 11 big-box stores in the United Kingdom. Adjusted for those costs, the company’s quarterly earnings totaled $2.47 per share.

Same-store sales—sales at stores open at least a year and an industry barometer—slid 2.4 percent during the quarter, but the decrease was less dramatic than the 4.7 percent drop experienced during the prior-year period.

For the full fiscal year, the company reported a loss of $3.36 per share, compared to earnings of $3.08 per share during the previous year. Same-store sales declined 1.7 percent during the year, essentially matching the 1.8 percent decline from the prior year. Revenue totaled $50.7 billion for the most recently completed fiscal year.

The company’s stock price was down more than 9 percent to $24.10 per share during Thursday morning trading.

—Jake Anderson
([email protected])

Datacard Invests in Maker of Smartphone Payment Tech

Datacard Group has invested in DeviceFidelity, and it will now offer the company’s In2Pay technology, which allows consumers to make purchases with the wave of a smartphone.

Minnetonka-based Datacard Group on Monday announced that it has made an equity investment in DeviceFidelity, Inc., a Richardson, Texas-based company whose technology turns smartphones into mobile payment systems.

Datacard Group manufactures identification card and credit card issuance technology. The investment—the terms of which were not disclosed—allows Datacard Group to offer DeviceFidelity’s In2Pay suite of products. The In2Pay MicroSD can be inserted into the SD slot of a smartphone; users then download an accompanying application to allow them to make payments by waving their smartphones in front of near-field communication (NFC) terminals, which are being used by a growing number of retailers.

The In2Pay technology also includes the iCaisse, a case that is designed specifically for iPhones and that also allows users to make “wave-and-go” payments by placing their phones in front of a wireless reader.

Russell St. John, senior vice president of global marketing for Datacard Group, said in a statement that as mobile payment technology is adopted by more retailers throughout the world, “financial institutions will have a great opportunity to capitalize on this by easily complementing their card programs without having to make major infrastructure changes to their existing processes.”

Dallas Venture Partners also made an equity investment in DeviceFidelity, the size of which was not disclosed.

Privately held Datacard Group’s annual revenues exceed $400 million, and the company employs more than 1,300 people worldwide, according to its website.

—Jake Anderson
([email protected])

U Start-Up Builds App for Safer Teen Driving

The DriveScribe mobile application blocks incoming calls, e-mails, and text messages while a vehicle is in operation; provides voice commands; and calculates a “safe driving score” after each trip; among other functions.

Do you ever wish you could monitor your teen’s driving habits? Or ensure they’re not texting or talking on the phone while behind the wheel? Now there’s an app for that.

Drive Power, LLC, launched a mobile application designed to monitor and coach drivers, especially teens. The Minneapolis-based start-up licensed the technology—which was developed by researchers from the University of Minnesota’s mechanical engineering department—from the university’s Office for Technology Commercialization.

The app, called DriveScribe, provides real-time feedback to the driver; notifies parents instantaneously about traffic violations; and logs driving data online for later review. It also blocks incoming calls, e-mails, and text messages while the vehicle is in operation; a personalized message is sent to those who are attempting to reach the driver. Many of the functions can be disabled; for example, the voice commands can be turned off if desired.

According to the university, roughly 16.5 million drivers are involved in crashes in the United States every year—and more than 12 percent are younger than 20 years old. That’s especially alarming considering that teenagers represent less than 5 percent of drivers.

“We’re trying to help teens become better drivers, sooner,” Alec Gorjestani—a researcher who developed the app and who also serves as Drive Power’s vice president of technology—said in a statement. “The crash rate for new drivers is very high, especially in the first six months of driving, so we decided to do something about it.”

Drive Power founder and CEO William England said in a statement that the National Transportation Safety Board recently called for a nationwide ban on cell phone use during driving—but he claims that DriveScribe offers a “much more practical, engaging, and ultimately effective solution to combat distracted driving as well as provide assistance to novice drivers.”

—Jake Anderson
([email protected])

Comcast Plans to Add Another 150 Local Jobs

The company, which in April announced plans to hire 450 workers at its new Minnetonka facility, now intends to add 150 jobs in St. Paul.

Comcast Corporation on Thursday announced plans to add 150 new call center positions at its regional headquarters in St. Paul.

The announcement represents the company’s second significant phase of hiring in the Twin Cities this year: Philadelphia-based Comcast in April announced plans to hire 450 new employees at its facility in Minnetonka. Mary Beth Schubert, Comcast’s vice president of corporate affairs for the Twin Cities region, told Twin Cities Business on Thursday that the company has completed about 250 of those hires and continues to add new employees in Minnetonka.

Schubert said that the St. Paul positions will be filled starting now and continuing into the first six months of 2012. After the Minnetonka and St. Paul hiring is completed, Comcast will have added roughly 600 jobs in the Twin Cities over the course of about a year and a half. Comcast currently employs more than 1,800 in the region.

For its new batch of hires in St. Paul, Comcast is seeking customer account executives to promote and sell high-speed Internet, video entertainment, telephone services, and other products and services.

The company seeks applicants who have a minimum of one year of experience in the service industry and “a commitment to deliver superior customer service.”

The company didn’t disclose specific compensation details but said that it offers employees “competitive pay as well as extensive career path options, medical, dental, and prescription benefits, and discounted Comcast services.” Interested candidates can learn more here.

Last year, Comcast rebranded its Twin Cities cable, Internet, and phone services as Xfinity. Critics at the time accused the company of trying to escape a reputation that it provides poor customer service—an allegation that company representatives denied.

“Comcast is about more than just delivering cable, Internet, and telephone—we’re all about providing good service along the way to put customers first and to run a great operation,” Schubert said Thursday. “As a result, we’re looking for individuals that have demonstrated a commitment to customer service.”

—Jake Anderson
([email protected])

Best Buy Closes UK Stores, Buys Out Partner for $1.3B

Best Buy said Monday that it will close its 11 big-box stores in the United Kingdom and also pay about $1.3 billion to buy out the Carphone Warehouse Group’s stake in Best Buy’s U.S. mobile phone business.

Best Buy Company, Inc., on Monday announced plans to shutter its 11 big-box retail stores in the United Kingdom and buy out a partner’s interest in a joint profit-sharing program in the United States and Canada.

The Richfield-based electronics retailer said that it will pay about $1.3 billion to purchase Carphone Warehouse Group’s contractual interest in its Best Buy Mobile chain. Under the previous agreement, Best Buy shared profits from its mobile business with Best Buy Europe—which is 50-percent owned by Carphone Warehouse.

Best Buy Europe operates about 2,500 “small-box” stores throughout Europe under the Carphone Warehouse and The Phone House brands. Last April, it piloted 11 big-box stores in the United Kingdom under the Best Buy banner—all of which will be closed by the end of this year. The decision to close the stores was “based on challenging economic conditions and profit expectations of these stores,” Best Buy said.

Best Buy also announced a new collaboration with Carphone Warehouse called “Global Connect,” which the company says will “provide the intellectual capital and connections expertise” to advise retailers on how to increase performance of their mobile products businesses in return for a share of their profits.

“Each of these actions represents an exciting growth opportunity for Best Buy and near- and long-term value for our shareholders,” CEO Brian Dunn said in a statement. “We are aggressively ramping up our growing connections capability to support consumers’ increasingly connected lives across the entire range of devices entering the marketplace.”

In a separate announcement made Monday, Best Buy said that it will acquire MindShift Technologies—a Massachusetts-based managed service provider for small and mid-sized businesses—for $167 million. MindShift provides cloud, data center, and professional services to more than 5,400 clients throughout the United States.

The recently announced moves align with Best Buy’s recent shift away from big-box retail stores and its increased emphasis on mobile technologies.

Investment research firm Bernstein Research offered its take on Best Buy’s news, stating that the “decision to close down the underperforming U.K. Big-box stores appears straightforward and logical, given the limited prospects of achieving even breakeven profitability . . .” The firm said that acquiring the Best Buy Mobile stake eliminates conflicts of interest arising from the previous profit-sharing agreement, and the MindShift deal “indicates another move by the company trying to re-cast itself as a growth retailer.”

Best Buy is Minnesota’s third-largest public company based on revenue, which totaled $49.7 billion for the fiscal year that ended in February 2010. The company reported $50.3 billion in revenue for its most recently completed fiscal year.

—Jake Anderson
([email protected])

Enventis Launches $24M Rural Broadband Project

Enventis said that its new fiber-optic network will expand high-speed Internet access in rural parts of the state—allowing for economic development opportunities, increased adoption of telemedicine, and better connections to state and local government offices.

Enventis, a subsidiary of Mankato-based HickoryTech Corporation, on Tuesday announced that its $24 million project aimed at expanding broadband access in rural Minnesota is underway.

The project, which Enventis calls the Greater Minnesota Broadband Collaborative Project, will extend the company’s fiber-optic network and improve high-speed Internet access—which will help connect health care facilities, schools, libraries, and other entities in rural communities, the company said.

Enventis received a $16.8 million grant for the project last fall under the National Telecommunication and Information Administration’s Broadband Technology Opportunities Program, a part of the American Recovery and Reinvestment Act.

The company broke ground on the fiber network earlier this month in northern Minnesota and Superior, Wisconsin, and it plans to build 430 miles of the network—and contribute $7.2 million in addition to the grant money—during the next two years.

“The project, which will be completed by 2013, will significantly increase our fiber network and enable high-capacity broadband services in greater Minnesota as well as create jobs,” John Finke, president CEO of HickoryTech, said in a statement.

Maple Lake-based MP Nexlevel, LLC, was awarded the construction contract for the fiber network.

HickoryTech is one of Minnesota's 70 largest public companies based on its 2009 fiscal-year revenue, which totaled $139.1 million. The company reported revenue of $162.2 million for its most recent fiscal year.

Enventis provides IP-based voice and data solutions, communication systems, and data center and other services to businesses across a five-state region.

—Jake Anderson
([email protected])