Tallevast telecom company grabs $30M in equity

TALLEVAST -- A Bradenton-area telecommunications company that is projecting growth of more than 50 percent for the coming year has just acquired $30 million in equity funding that will fuel its expansion.

Star2Star, a manufacturer of and service provider for voice-over-Internet protocol telecommunications systems, announced last month that it acquired the funding from NewSpring Capital, a family of private equity funds headquartered in Radnor, Pa. Les Freed, Star2Star's communications director, said the equity will act as a pool of cash into which the company can dip to grow its dealer network and sales force.

"We're going to pretty much do more of what we've been doing," Freed said.

The $35 million company, which is headquartered at 600 Tallevast Road, is in the midst of a work force and physical plant expansion. It is adding 30,000 square feet to its current 62,500-square-foot facility in Tallevast and is projecting that the company will add 350 employees

over the next five years. Star2Star already employs about 200 people.

The NewSpring equity infusion is the first the company has taken since the company's founders put money into Star2Star.

Freed said that while the company sells its StarSystem cloud communications solution through installers and other retailers, it still needs to increase the size of the sales force that works with those third-party resellers. The company sells its product nationwide but still has yet to reach into some small areas of the country.

While taking on this kind of equity is often a sign that a company is planning to go public or undertake an acquisition, Freed said Star2Star is not presently inclined to take either route.

In a press release, Star2Star chief executive Norman Worthington said the NewSpring Capital deal "is the next step toward securing our place at the top of the increasingly crowded communications marketplace."

Freed said Star2Star had numerous choices among equity investors but chose NewSpring because the company allowed Star2Star officials to speak with CEOs of other companies in the NewSpring investment portfolio. Star2Star is the 100th company in NewSpring's portfolio.

Matt M. Johnson, Herald business reporter, can be reached at 941-745-7027, or on Twitter @MattAtBradenton.

This story was originally published January 7, 2015 at 12:00 AM with the headline "Tallevast telecom company grabs $30M in equity ."