gen-E and Columbus Communications to Co-present at Gartner IT Infrastructure & Operations Management Summit
San Clemente, CA - June 6, 2014 - gen-E, provider of a fully integrated approach to accelerating incident resolution in network and IT operations, today announced that the company's chief technology officer, Duke Tantiprasut Ph.D., and the chief information officer of Columbus Communications, Andre Foster, will co-present at Gartner IT Infrastructure & Operations Management (IOM) Summit, held June 9-11 at the Gaylord Palms Resort & Convention Center in Kissimmee, Florida.
Read entire press release
Software Industry Veteran Martin Savitt Joins gen-E as CEO
Savitt brings 17 years of enterprise software leadership to gen-E
San Clemente, CA – May 15 , 2014 – gen-E, provider of a fully integrated approach to accelerating incident resolution in network and IT operations, today announced that Martin Savitt has joined the company as Chief Executive Officer.
Read entire press release
Volume Here Bucks Nat'l Trend for 3% Jump on 310 Deals
Number of Deals Down 11% in U.S.; Total Value Up
The pace of merger-and-acquisition activity by Orange County businesses rose by about 3% in 2013, capping the year at 310 deals.
This week’s Special Report includes lists of the largest transactions involving local companies based on data compiled by Los Angeles-based investment bank B. Riley & Co. The tally came to about a 55%-45% split between local buyers and sellers.
The uptick in deals could be explained in part by a general improvement in the U.S. economy, said Rory McKinney, a managing director of the OC office of D.A. Davidson & Co., a Great Falls, Mont.-based financial services firm. It consolidated its Southern California offices last year, bringing its L.A. group to OC and setting up an office in Costa Mesa.
“I think that corporations and small businesses are fundamentally improving as the economy is improving,” McKinney said.
“That’s naturally a driver for more M&A activity. Also, the stock market performance in 2013 was very impressive. So if you look at valuations from a public company’s perspective, most industries had a healthy year last year when it came to the stock price. That intrinsically increases the value of the respective companies within those industries. That’s a result of improving fundamentals, improving corporate balance sheets.”
Orange County deals bucked the national trend, which was off volume-wise despite the overall economy and the healthy stock market.
The number of transactions in the U.S. fell about 11% to 9,263, according to FactSet Research Systems Inc., a Norwalk, Conn.-based financial data company. The total deal value was up, though, by 7% to $958 billion.
That’s the best possible comparison in terms of dollar values, considering prices are available for roughly 30% of the deals in the FactSet research. That’s about the same level of disclosure from the companies featured on the Business Journal’s lists.
“A lot of the deal information is not reported because they’re privately held,” McKinney said. “That’s just the nature of the beast.”
Orange County companies accounted for 172 purchases, up from 164 in 2012. Target businesses ranged from healthcare technology and security services to banking and homebuilding. About 10%—the largest group—were in the Internet software and services sector.
Transaction values, disclosed for 44 purchases, totaled $6.4 billion. Individual deal prices ranged from $35,000 to the more than $2.7 billion proposed acquisition of Weyerhaeuser Real Estate Co. by Irvine-based homebuilder TRI Pointe Homes Inc.
Deals averaged about $146 million.
That’s more than double the $61 million average price paid by OC buyers in 2012, when about the same level of term disclosures was available.
The average deal without TRI Pointe’s acquisition was about $86 million.
Other larger acquisitions included Irvine-based drug maker Allergan Inc.’s buy of Map Pharmaceuticals Inc. for $962.3 million.
The two next biggest deals were notched by Irvine-based disk drive maker Western Digital Corp. through its Hitachi Global Storage Technologies Ltd. subsidiary. The company acquired Milpitas-based Virident Systems Inc. for $685 million and STEC Inc. in Santa Ana for about $341 million.
Aliso Viejo-based chipmaker Microsemi Corp. paid $304 million for Symmetricom Inc., a San Jose-based company that specializes in time-keeping technology.
Serial buyers included Universal Services of America Inc., a Santa Ana-based security services provider. It had eight announced deals, according to the B. Riley research. The transaction price was disclosed for one: Universal Services paid $21.3 million to acquire IPC International Corp. in Illinois in April.
Irvine-based food manufacturer and distributor Golden State Foods Corp. closed three deals, including the buy of Wichita, Kan.-based KanPak LLC, a desserts and beverages maker. It also bought a 51% stake in KanPak’s China operations in 2012. Terms of privately held Golden State Foods’ deals are typically undisclosed.
Irvine-based Advantage Sales & Marketing LLC acquired three East Coast businesses, in Massachusetts, North Carolina and Florida.
Deal pace was slower for OC buyers in the first quarter, when 35 buys were announced or closed. The other three quarters averaged 45 deals each.
“2013 started out slow, because whatever was going to get done got done in 2012,” said Wayne Pinnell, managing partner of Irvine-based accounting firm Haskell & White LLP.
He pointed to a general year-end rush in 2012 for sellers to close deals to avoid capital-gains tax rate increases that took effect in 2013.
“But if [sellers] weren’t tax-motivated in 2012, the issue really is a continued focus on growing the company and growing the profits for a higher value in an exit,” Pinnell said. “It still goes back to the Great Recession, when companies lost a lot of value. There’s a continued focus of the workforce on working longer. People are working past normal retirement age, and owners are trying to rebuild lost value before they look at options to sell.”
OC-based companies accounted for 138 sales, with deals spread about evenly across quarters. The fourth quarter had the fewest: 31.
Transaction values, available for 40 deals, totaled $2.5 billion. Sale prices ranged from $75,000 to $765 million, with nearly half of the bunch going for less than $10 million.
OC companies on average fetched $62 million, versus $181 million in 2012, which was pushed up by the $2.4 billion sale of Quest Software Inc. to Dell Inc.
Last year’s priciest sale was for Seal Beach-based Custom Building Products Inc., which drew $765 million from Quikrete Holdings Inc. in Atlanta.
Custom Building Products makes tile-installation systems and flooring preparation products.
It’s been part of the investment portfolio of New York-based private equity firm Kelso & Co. since 2005.
Newport Beach-based chipmaker Mindspeed Technologies Inc. was acquired by M/A-Com Technology Solutions Holdings Inc. for $277 million. Mindspeed’s wireless infrastructure business unit was recently sold to Intel Corp. on undisclosed terms.
A few local banks were in the mix, including Fountain Valley-based Centennial Bank, which merged into Phoenix-based Western Alliance Bank in a $57.5 million transaction.
Commerce National Bank in Newport Beach was sold to Spokane, Wash.-based Sterling Financial Corp. for $45 million.
An Buena Park-based Los Angeles National Bank sold to Royal Business Bank in L.A. for an undisclosed amount.
D.A. Davidson’s McKinney, who specializes in advising financial institutions, said more M&A activity in the banking sector is likely.
“That’s because revenue growth is a challenge,” he said. “The low-interest-rate environment is causing margins to get squeezed. I think scale in the banking sector is very, very important today. Naturally, if you’re a smaller company, you don’t have the same operating leverage as you would as a larger organization. We’ll see the [deal pace] continue, along with the economy incrementally improving.”
Private equity investors are also a reason to expect a robust M&A scene this year, said Dan Lubeck, founder and managing director of Newport Beach-based investment firm Solis Capital Partners LLC.
“The private equity activity cycle is closely correlated with the availability of debt,” Lubeck said. “When the economy crashed in 2008, the debt market crashed, and it was hard to follow money for acquisitions. But it’s slowly coming back. We’re seeing lenders being more aggressive and more competitive. That’s actually been the case already for a year-plus in some of the bigger deals. Now it’s even visible in the smaller deals.”
Solis focuses on companies with $15 million to $100 million in revenue. It’s currently investing out of its second fund, Solis II, which closed last year with $61 million.
Lubeck also pointed to the population of baby boomer business owners as a potential driver of a continued increase in mergers and acquisitions.
“Particularly in California, you have a number of business owners that are baby boomers that are looking for what the next step is for them,” he said. “A good number of them will be selling part or all of their companies.”
gen-E joins the Red Herring Top 100 Global Award Winner's Circle
gen-E, a Solis Capital portfolio company, has been recognized for it's Technology Innovation
San Clemente, CA - December 10, 2013 - gen-E, a global IT process automation (ITPA) software company, today announced that it has been named a winner of the coveted 2013 Red Herring Top 100 Global Award, which has become a mark of distinction for identifying promising companies and entrepreneurs.
Read entire press release
gen-E Receives Patent Approval on it's Proprietary IT Process Automation Platform
gen-E’s Resolve is the only IT process automation software to offer patented dynamic knowledge management and interactive capabilities as an integral part of its platform
San Clemente, CA - November 7, 2013 - gen-E, a Solis portfolio company, today announced that it has received a patent on its proprietary IT process automation software.
Read entire press release
Solis Capital Takes Stake in Irvine Telecom
Irvine-based telecommunications company Horizon Communications Technologies has sold a “significant” ownership stake to Solis Capital Partners LLC, a private equity firm in Newport Beach.
The purchase price and percentage of ownership were undisclosed.
Horizon Chief Executive Mike DeGraw, who bought the company in 2010 after working in the telecom industry for about two decades, said he remains a “significant shareholder” under terms of the deal.
Horizon for several years has provided cabling services for office buildings, including those owned by Newport Beach-based Irvine Company, which is the largest office landlord in Orange County and has acquired substantial holdings in the San Diego and Silicon Valley markets in recent years.
DeGraw brought additional business for Horizon, which now gets a substantial portion of its revenue from installing wireless networks at sports stadiums, as well as designing and building infrastructure for large data centers.
Horizon’s list of past and ongoing projects includes work for Twitter Inc. and Salesforce.com Inc., both based in San Francisco. The company also has worked on the Honda Center in Anaheim and the Chase Field in Phoenix. It’s currently halfway through a project at Dodger Stadium in Los Angeles.
“The stadiums part is about 70% of our business,” DeGraw said. “Data centers are big as well, but just not the sheer size and scope of putting in a network in a 60,000-seat stadium.”
Horizon has annual revenue of about $16.5 million and about 100 employees, according to DeGraw—“big changes” compared with when he bought the struggling company.
“There wasn’t a whole lot going on at the time,” he said. “The company really just had a riser-management contract with the Irvine Company. By riser-management I mean the telecommunications infrastructure that runs vertically in a building. We still value that business and maintain it. But the problem was, in 2008, 2009, nobody was moving.”
DeGraw oversaw a shift in company culture and helped it grow about 50% the first year after he took over.
It helped that he was able to bring in relationships built up from his previous stints. He most recently served as part of executive management at Leucadia National Corp., a New York City-based holding company that operates through its investment banking, energy and telecommunications arms, among others.
DeGraw ran several of Leucadia’s operating companies, including WilTel Communications Group LLC, which was acquired by Broomfield, Colo.-based Level 3 Communications Inc. in 2005 for nearly $800 million. He also launched and managed TeleBarbados Inc., a local phone company in Barbados.
gen-E Announces New Enterprise IT Process Automation Solutions Based on its Award-winning Resolve Software at Gartner Symposium/ITxpo 2013
gen-E, a Solis Capital Partners portfolio company, today announced that the company will exhibit at the Gartner Symposium/ITxpo 2013, held October 6-10 in Orlando, Florida. The company will showcase its new Resolve™ Storage Management and Resolve Application Performance Management solutions, among others, in booth #244.
Read entire press release