Friday Q&A: Alteva’s David Cuthbert on being acquired

David Cuthbert has had three job titles in less than three years.
In 2010, he was promoted from director of operations to CEO of Old City-based Alteva before the company was purchased by New York-based Warwick Valley Telephone for $17 million in July. Now he’s COO and President of Alteva while former CEO and co-founder William Bumbernick has stepped down from the company.
With companies like GSI Commerce selling to eBay and MyYearBook selling to Quepasa, Philadelphia-area technology companies have been prime targets for some of tech’s largest acquisitions in the past year.
We sat down with the former Alteva CEO to see what it’s like to be acquired. We also ask if the $17 million price tag was too cheap and if the company is staying in Philadelphia.

What led to the acquisition by Warwick Velley? Why now?
Nothing made it necessary. It was a very nice opportunity at the right time. Alteva has grown well, but we’re seeing consolidation in the market. In Philadelphia, as you said, we’re seeing mergers across all areas. In telecommunications there are many acquisitions happening. We wanted to put ourselves in the best position to compete. When the opportunity came with Warwick valley, we felt that was a great time to do that.
So you sensed the market heating up and figured now was as good as a time as ever?
Yes. We weren’t actually out looking. They approached us.

We’re not telecom experts, but when we saw the sale price of $17 million, we admittedly thought that was kind of low from an outside perspective for a company with 20 to 30 employees.
Well, it’s nearly three times revenue.
Fair enough. What does this mean for Philadelphia? Are you staying in the same office?
We absolutely intend to stay in the city. We are actually hiring right now and will continue to hire into the end of the year. Whether we stay in The Bourse remains to be seen. It’s a matter of desk space. We fully intend to grow the workforce here in Philadelphia.
Did location have anything to do with the acquisition? Or did it have more to do with the resources and customers you guys have?
It’s more about the latter. Though there is always a level of practicality to location as we’re both on the East Coast here.
A lot of Philadelphia companies are being acquired but not doing the acquiring. Do you have any thoughts on that as a local CEO?
A really good question, I hadn’t thought about that. I’m no expert, but its seems like Philadelphia is doing very well from a technology and growth view, we seem to be beating the national average there.
The financial area that’s centered in New York has had a hard go the past few years. Here you have life sciences and tech companies that seem to be doing pretty well. Quite possibly, maybe companies outside of Philadelphia see that. It seems like Philly is doing pretty well.