Universal Solutions sold to Black Box

A local technology company that required deeper pockets to stay competitive and grow has been sold.

Universal Solutions of North America, a telecommunications firm that moved its headquarters to Charleston from Mississippi two years ago, was purchased last week by Pittsburgh-based Black Box Corp. Terms of the deal were not disclosed.

Bob Scott, a James Island native and Citadel graduate who co-founded Universal Solutions, said the company is being run as a standalone subsidiary of publicly traded Black Box. Its headquarters will remain in Charleston.

"The sale really will not change anything, other than we now have a very large owner," said Scott, who has agreed to stay with Black Box for at least two years. All 200 Universal Solutions workers, including 45 in Charleston, were offered positions with the new parent company, he said. "This is a growth acquisition, not a scenario where Black Box was looking to cut costs," Scott said.

Universal Solutions, which was founded in 1998, designs, installs and maintains voice and data network systems for business clients. It has 12 regional offices and customers in 14 states. Annual revenue is about $40 million, according to Black Box, which has 152,000 clients in 141 countries with 126 locations worldwide. Scott said Black Box had approached him about selling his company twice before. The third round of talks began in March, he said.

Scott said his former company had grown about as much as it could on its own. "The market we're in is changing and consolidating," he said. "To be able to compete, maybe not today but in two or three years, you're going have to be larger in scale. The products are becoming a lot more complex, and you need the technical expertise to support that, which requires a lot of money."

Small competitors "are going to find it very difficult to survive" in that environment, Scott added. "We found it was the right time to be ahead of the curve and negotiate a deal before it became imperative," he said.

Scott said his former company and Black Box offer complementary services and do not directly compete with each other. In fact, he said, they worked together wiring up a BlueCross BlueShield call center in Columbia. "What they want us to do is concentrate on our core market, which is the Southeastern United States and grow that business significantly as they go and acquire additional companies that cover the rest of the U.S. in the voice sector," he said.

Black Box posted $535 million in revenue in its last fiscal year, when its earnings plunged 36 percent to $30 million. The company has earmarked $150 million to $200 million for mergers and acquisitions under an effort to reach the $1 billion sales mark by early 2007.

Universal Solutions joins the list of locally based companies that have been sold to larger public businesses this year. This month MBT Holding Corp., the nation's second-largest distributor of musical instruments and accessories, was snapped up by industry kingpin Kaman Corp. for $30 million. In April, online retail titan Amazon.com bought North Charleston-based publisher BookSurge. Ernest Andrade, who runs the Charleston Digital Corridor, a city-funded technology initiative, said such deals show that big public companies are paying attention to homegrown talent. "On a net basis, it's a positive thing for the community," he said.

Corridor Note: Universal Solutions is a member of the Charleston Digital Corridor. Robert Y. Scott, the CEO of Universal Solutions, was an immediate past board member of the Charleston Digital Corridor Foundation.