Consolidation comes to Telecom Research

British consultants Ovum is in talks to acquire RHK, Inc., sources close to the situation say. Ovum will buy the research assets of RHK, including databases and existing subscription contracts. The RHK will be left with some consulting business, which will be known as RHK Consulting, but only up until December 2005. The deal is being pegged at between $3-and-$4 million. Ovum is estimated to be over $25 million a year in sales operation. RHK is said to have annual research business in excess of $2 million. Ovum started sniffing at RHK in February this year, and hopefully the deal should close soon.

RHK can trace its roots back to the early days of the optical boom. RHK, which is based in South San Francisco was started by well known industry insiders, John Ryan, Peter Hankin and Jim Kent. In early days it was known by its original name, Ryan Hankin & Kent, but during the boom-years, the company changed its name to RHK. In many ways it became an icon of the boom, and it was hard to find a single presentation that did not have some data from RHK.

As the boom gained momentum, RHK expanded into forecasting and started tracking tangential areas such as semiconductors. One of its founders, Peter Hankin went on to become part of Optical Capital Group, even though the other two founders are still part of the management team.

But as its main clients, most VC funded start-ups started to collapse, RHK’s fortune’s took a turn for the worse. It has become a strategic advisory service, a pale shadow of its formal self. The company has been looking for a possible buyer for its research assets for over two years. In March 2003, RHK had hired Laird Squared, an investment banking firm to look for a buyer. In fact, sources close to the company say that it had tried to sell itself to everyone – from Adventis to Current Analysis to Light Reading and The 451 Group – without much luck.