Enterasys to return to N.H. with 540 jobs

The move back to New Hampshire represents a remarkable comeback for the firm, which left the state in 2003

Enterasys Networks announced Tuesday that it will be moving back to New Hampshire, bringing a total of 540 jobs to the old Cisco building in Salem.

The rapidly growing, privately held networking company said it was leaving Andover, Mass., for the Granite State's "low-tax, business-friendly attitude," said Chris Crowell, the company's CEO.

Crowell said the move back to New Hampshire represents a remarkable comeback for the firm, which left the state in 2003.

"It's been a 180-degree turnaround," said Crowell. "When we left the state, quarter after quarter we were losing revenue."But the company has grown during the last eight quarters, and is "bursting at the seams" at its Andover facility.

When Enterasys abandoned Rochester in March 2003, it was two years after its disastrous spinoff from publicly held Cabletron Systems, once the state's largest employer.

But by 2003, Enterasys became a shadow of its former self, reeling from an accounting fraud scandal that resulted in long federal prison terms for eight former executives.

Enterasys also became a political issue because it collapsed and fled the state during the campaign and only term of former Gov. Craig Benson, Cabletron's co-founder.

(The legal aftermath is still being played out in U.S. District Court in Concord, with the ongoing civil suit of the U.S. Securities and Exchange Commission against Cabletron's former general counsel Eric Jaeger and its former chief operating officer, Jerry A. Shanahan.)

In 2005, The Gores Group and Tennenbaum Capital Partners acquired the company for $386 million, took it private and merged it with another acquisition, Siemens Enterprise Communications.

The new ownership pledged to turn the company around by emphasizing customer service, security and a focus on the institutional market. By 2009, after the recession hit, the company had the capital to invest in R&D and was well-positioned to take advantage of the demand created by cloud computing.

While the L2/L3 Ethernet switching market has been growing at a rate of about 3 percent, Enterasys revenue grew by double digits through the first three quarters of 2011, the company said. (As a privately held company, Crowell wouldn't release sales figures. The rate of growth could not be verified.)

The company outgrew its current 150,000-square-foot headquarters in Andover and found a lower-priced lease at 9 Northeastern Industrial Drive in Salem, only 6.5 miles away. The space was left vacant after Cisco Systems — a former rival of Cabletron — moved out in 2005.

"It's ironic, but it wasn't like we were trying to stick our nose at Cisco," said Crowell. Cisco is much larger than Enterasys, though the two companies do compete in some segments of the market.

Crowell said the move to Salem was made because "we have a landlord that was willing to invest and revitalize the building," he said.

The company also likes the new facility because "there is space for expansion if we need it," Crowell said.

The company plans to hire 80 more people, primarily for research and development.

"We'd like to do more than that. It's a matter of finding enough talent," Crowell said.

The landlord — Boston-based Equity Industrial Partners — has done "a wonderful job, a new entrance a new façade," according to Michael Bergeron of the New Hampshire Division of Economic Development who help facilitate the move.

The technology park has already attracted a number of other tenants — CCS Companies, Nora Systems and Comcast — but Bergeron said he was "very excited about this big move."

Construction will start in the beginning of April, with a move-in date planned for January 2013.