GLOBAL GROWTH EXPERTS. Case Study Acme Packet: A High Tech International Expansion Success Story

Transcription

1 Case Study Acme Packet: A High Tech International Expansion Success Story

2 Introduction In 2005, Acme Packet was revolutionizing the way telecommunications companies and large corporations managed their phone, data, and internet communications by moving all three over IP networks. Sales of their innovative products were strong, and Acme had already begun attracting several customers overseas. Acme s leadership knew it was time to accelerate and further their development of an overseas presence and fast. The Challenge Over the course of the next several years, Acme would have to repeat the process of establishing and growing a presence in dozens of countries. To do that, they would need support on a whole range of international expansion issues. As bare footprints in some countries grew into large offices, Acme would have to convert its entity structures and migrate employees to new entities. In addition, as Acme would predictably have to terminate some overseas staff for performance or other cause related reasons, it would come up against foreign labor laws far stricter than American employers encounter at home. Acme was determined to attract the best talent wherever it went, but it lacked experience in structuring compensation packages across different markets. As a fast-growing startup, for example, Acme would be granting stock options to overseas employees. This meant that in each jurisdiction in which it operated, it would face a different set of rules for taxing those options and the gains on them. Acme had a lean team and a winning product. What it didn t have was the expertise and bandwidth required for rapid international growth. Devoting significant resources and focus to navigating a patchwork of tax, accounting, labor, and immigration laws would only slow them down.

3 The Solution Andy Normand, the Director of HR at Acme Packet and Keith Seidman, Acme s then CFO, began searching for outside assistance. He realized that what Acme needed was not one-off help with a single issue in a single country. If Acme s international expansion were to succeed, Normand and his team would require ongoing assistance on a range of interconnected issues wherever its business took it. Seeking out new sources of help as each issue arose would be distracting and exorbitantly expensive. What Acme needed was a long-term partner in its international expansion one that could provide comprehensive services across the globe. We looked at a few solo practitioners, and evaluated our options, Normand says, but only Radius had the global knowledge base we needed. The relationship allowed Acme to charge ahead with its expansion while Radius anticipated and handled potential obstacles. Radius immediately began laying the foundations for Acme Packet s new offices abroad. Initially, Acme was only hiring 1-2 employees in each country. But expecting growth, Radius ensured the entities Acme established were positioned for rapid scaling. As Acme Packet grew, Radius implemented a standardized international reporting system across the board and housed it under a single accounting platform. With Radius streamlined approach, the financial closing cycle was reduced dramatically to as little as 2-5 business days. When Acme had to navigate the notoriously difficult processes for terminating employees in the UK and Germany, the EU more broadly as well as its Asian markets, Radius guided it through every step of the way. Our advisors almost literally held our hands through those employment challenges Normand says. They saved our firm significant time and money in the long run, and I was able to sleep better knowing they were handling these difficult issues for us.

4 While proper planning set the ground for a smoother expansion, the fast-paced startup also encountered its fair share of unanticipated issues. When obstacles did pop up, they had to be dealt with quickly. Of course there were hiccups, but Radius was stellar in problemsolving and in the timely resolution of the issues that arose, Normand says. Such instances demonstrated the value of Acme s ongoing and global relationship with Radius. As the two firms grew together, Radius developed a deep understanding of Acme s business. When Acme encountered a new challenge, its executives never wasted time searching for outside help. They knew exactly who to call. Radius advisors, in turn, wasted no time orienting themselves to the context and background of Acme s challenges they were already immersed in them. International expansion is complex, but working with Radius made the advisory relationship simple, said Normand. The Outcome What began with a few individuals in a couple of international offices grew into a global workforce of 260 international employees and another 60 consultants. With Radius at its side, Acme successfully established and managed operations in 34 countries. By February of 2013, Acme Packet commanded a 50 percent market share in the session border controller business that it had helped create, boasting almost 2,000 customers across 109 countries. In April 2013, Oracle acquired the company for $2.1 billion.

5 About Radius Radius helps businesses move into new markets, manage overseas operations and outsource entire global accounting and administrative functions. Services include integrated, international accounting, finance, banking, tax, HR, legal and compliance services, as well as a cloud-based software platform that allows you to manage all of your global operations from your desk. Radius combines the collective talents and resources of the former Nair & Co and High Street Partners. To assist its clients, Radius has developed OverseasConnect, an integrated cloud-based software platform for the management of international business operations serving Finance, HR and Legal teams. Radius is headquartered in Bristol, U.K., and supports more than 6,000 client operations in more than 80 countries, with core offices in the U.K., India, China, U.S., Japan and Singapore. This bulletin is written and provided for general information purposes only, and is not intended to address the circumstances of any particular individual or entity. The information contained herein is subject to change, and is not intended as and should not be used as a substitute for taking professional advice. We do not provide any representation or warranty (express of implied) as to the accuracy or completeness of the information contained herein, and to the extent permitted by law, Radius does not accept or assume any liability from the use of this bulletin. Any tax advice contained herein (including in any attachments and enclosures) is not intended to and should not be construed as an opinion. No one should act, or refrain to act, in reliance on the information contained in this bulletin without seeking professional advice after a thorough examination of the particular situation. If you have any questions about this information, please contact your usual Radius representative or advisorycontent@radiusww.com.