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Irish Independent
5 days ago
- Business
- Irish Independent
Echelon action over alleged hijacking of US data centre plans should be thrown out, say former business partners
Irish data centre developer Echelon has sued two American firms, power provider MPD Electric Cooperative and commercial real-estate developer Marlboro Development Team (MDT), alleging they hijacked its multi-billion-dollar plans to build data centres in South Carolina. Echelon stated in the court complaint, filed by its parent company, Nimol, that the US firms had 'improperly used' confidential information to 'co-opt the data-centre development plans' and complete the project without the developer. The company accused MPD and MDT of breaching agreements 'with fraudulent intent'. Last week, MPD and MDT filed a response at the US court rejecting the allegations, calling for the court to dismiss three of the causes of action in the case. These included breach of contract accompanied by a fraudulent act, violations of the South Carolina Unfair Trade Practices Act, and breach of fiduciary duty. The two American companies argue Echelon's complaint was nothing more than "a thinly veiled and redundant breach of contract claim'. 'Even from the complaint alone, it is clear that the parties were involved in a complicated transaction that ultimately fell apart,' the lawyers wrote. 'An unsuccessful business venture is not an unfair trade practice.' They contend the complaint lacks the 'particularity' required to sustain fraud claims under US laws, fails to demonstrate any impact on the wider public interest, and does not establish the existence of any special relationship that could give rise to fiduciary duties. The dispute centres on 'Project Diamond', a 2023 initiative under which the defendants were to secure properties to be sold to Echelon for development into data centres, with MPD providing electrical services. In Echelon's initial complaint, the data centre developer claimed it was 'prepared to invest billions of dollars' in developing and leasing large-scale data centres in four counties of the Pee Dee Region of South Carolina. The Irish company's proposed projects would have been 'some of the largest economic investments in South Carolina history", the company added. In April, Echelon alleged it came into possession of a promo flyer for a proposed data centre 'substantially the same' as its own Echelon said it began exploring locations in the US for expansion in 2023 and met with a senior executive of MPD and MDT. It claimed to have worked with MPD and MDT for over a year, alleging the businesses gained 'intimate' knowledge of its inner workings. At the 'eleventh hour', Echelon alleged MPD and MDT made 'outrageously off-market demands' and took steps to 'intentionally destroy' the projects from happening by refusing to close on critical property. Echelon claims it tried to salvage the deal, but the Americans refused to work in good faith. In April, Echelon alleged it came into possession of a promotional flyer for a proposed data centre in one of the areas it planned to develop. It claimed parts of the plan were 'substantially the same' as its own. Echelon claims MDT and MPD improperly used its confidential information to plan and advertise this proposed data centre. The Irish firm is seeking a judgment against MDT and MPD, as well as damages. gg
Yahoo
12-05-2025
- Business
- Yahoo
Sangoma Technologies Corp (SANG) Q3 2025 Earnings Call Highlights: Strong Financial Performance ...
Release Date: May 08, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Sangoma Technologies Corp (NASDAQ:SANG) delivered strong financial performance in Q3 with revenue of $58.1 million and adjusted EBITDA margins at 17%. The company achieved an operating cash flow conversion from adjusted EBITDA of over 100%, indicating strong cash generation. Sangoma Technologies Corp (NASDAQ:SANG) has successfully completed its major transformation project, Project Diamond, positioning the company for future growth. The implementation of a new ERP system is expected to result in efficiency gains and cost savings of approximately $5 million over the next three years. Customer satisfaction has significantly improved, with Net Promoter Scores up nearly 300% and customer churn remaining low at 0.9%. There was a slight revenue decline in Q3 due to the shift away from lower-margin hardware reselling. The company is facing longer sales cycles in the hardware segment due to macroeconomic factors such as tariff tensions. Sangoma Technologies Corp (NASDAQ:SANG) is in the process of divesting non-core assets, which may impact short-term revenue. The market for on-premises solutions is declining, posing challenges for growth in that segment. The company is still navigating the complexities of integrating multiple acquisitions, which can be resource-intensive. Warning! GuruFocus has detected 2 Warning Signs with SANG. Q: Do you think Sangoma has fully hit its stride under the new program, or is there more sales momentum to be seen? A: (Unidentified_2) Sangoma is building momentum, akin to a 1,500-meter race. We are in the third lap, beginning to accelerate due to more efficient systems and processes. The transformation over the last 15 months has set the stage for increased momentum in FY26. Q: How is the partner program progressing, especially with recent disruptions in the on-prem channel? A: (Unidentified_3) We've added about 56 new partners since January, focusing on those with strong niches in specific industries like healthcare and hospitality. Our Pinnacle Partner Program is gaining traction, aligning with our unique value proposition of integrated solution bundles. Q: How do you view the opportunity in the on-prem business given recent industry changes? A: (Unidentified_2) The on-prem market is valued at approximately $3.3 billion. Even capturing a small market share could significantly contribute to our revenue. We are seeing increased interest from resellers of legacy competitors and expect this to be a strong portfolio for us in FY26. Q: Are you experiencing longer sales cycles due to macroeconomic factors like tariff tensions? A: (Unidentified_2) Sales cycles for our MRR business remain normal at 6 to 12 months. However, the hardware side has seen volatility and longer sales cycles due to tariff-related confusion, which is why we are divesting from non-core hardware resale. Q: How important are acquisitions to your strategy over the next 12 months? A: (Unidentified_2) Inorganic growth is a third of our growth strategy. With our transformation complete and debt reduced, acquisitions are now a viable option. We are in a favorable position to begin inorganic acquisition activities as part of our FY26 plan. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
