Polycom Inc. (PLCM), a maker of video- conferencing equipment, sued leveraged buyout firm Sun Capital Partners Inc. for allegedly violating the terms of a share- purchase agreement valued at as much as $114 million.
Sun Capital Partners said on May 10 that its affiliate had agreed to purchase the enterprise wireless communications division of Polycom for $110 million in cash. Polycom, based in Pleasanton, California, said in an Aug. 21 filing with the U.S. Securities and Exchange Commission that the deal could bring $4 million more and that the company would sue to enforce the agreement.
“Defendants have breached and are continuing to breach several interrelated contracts” for the transaction, Polycom said in a case summary filed yesterday in Delaware Chancery Court in Wilmington. Most of the documents were kept secret by the court.
Polycom declined 1.1 percent to $9.53 at 11:40 a.m. New York time in Nasdaq Stock Market trading. The shares dropped 41 percent this year before today.
“As a matter of policy, Sun Capital does not comment on pending litigation,” the Boca Raton, Florida-based company said in an e-mailed statement from spokesman Chuck Dianis. “We are proud of our reputation of having integrity and fairness, and we have acted, and continue to act, in good faith in this matter.” The firm said it would fight the lawsuit.
Sun Capital said in May that the deal should be completed in the third quarter.
The case is Polycom v. Sun Capital Partners, CA7803, Delaware Chancery Court (Wilmington).