Irvine-based networking gear maker Lantronix Inc. has raised $10 million in a public offering, and has its eyes on using some of the proceeds to beef up its product line.
The late September offering—underwritten by Needham & Co. and Lake Street Capital Markets—resulted in about $9.1 million in proceeds. Lantronix’s market value is about $90 million.
Proceeds will be used for working capital, capital expenditures and other general corporate purposes, the company said. Some of the funds could also be used to finance acquisitions; company executives said they are seeking strategic buys to boost product lines.
“One of the strategic plans is accelerating growth via inorganic opportunities to augment our organic growth plans and raise cash in pursuit of that strategy,” Chief Executive Jeff Benck told the Business Journal.
The company is scouting growing companies in the Internet of Things segment with complementary products or in adjacent markets, he said.
Lantronix (Nasdaq: LTRX) makes electronic devices and related software that allow secure online communication in medical equipment, motor vehicles, thermostats, retail terminals and ATMs, among other products.
Its technology has been used by industrial and enterprise customers for more than 25 years.
The IoT segment is forecasted to grow from about $3 trillion in 2014 to $8.9 trillion in 2020, with big gains across the industrial manufacturing, healthcare and life sciences segments, according to marketing researcher Statistica.
It’s been a busy few months for Lantronix.
Early last month, I reported on the company’s stock price nearly doubling in August, thanks to a string of positive announcements and earnings results, and notable partnerships.
The announcements included the addition of high-profile chief-executive-turned-activist-investor James Peterson, popularly known locally as Jimmy P. He held the top post at Aliso Viejo-based chipmaker Microsemi from 2000 until late May, when the chipmaker’s $10.3 billion sale to Microchip Technology Inc. in Arizona closed.
His newly launched private-equity firm, Peterson Capital Group, disclosed in mid-August that it took a 6.4% ownership stake in Lantronix.
Benck said he’s assembled a seasoned management team with deep experience in handling mergers and acquisitions, not even factoring in the involvement of Peterson, who oversaw dozens of M&A deals during his tenure at Microsemi.
“Now that the company is back on the right track, it’s time to focus on this,” Benck said.
The September offering, priced at $4 per share, had a big effect on Lantronix’s stock price; shares had been trading around $6 each before the announcement but quickly lost August gains.
Shares now trade around $4.10.
Blastoff
Huntington Beach-based aerospace manufacturer Rocket Lab has signed a contract with a Luxembourg-based company to launch scouting satellites for defense and surveillance purposes.
Financial terms of the deal with Kleos Space S.A. weren’t disclosed.
The Kleos Scouting Mission will form the foundation of a 20-system constellation that will geolocate VHF transmissions from marine vessels to provide global intelligence data as a service.
The constellation will detect radio transmissions and pinpoint their origins and timing, enabling governments and organizations to detect activities such as drug and human smuggling, illegal fishing and piracy, as well as assist in search-and-rescue at sea.
The satellites, built by Denmark-based GomSpaceis, are scheduled to launch in mid-2019 from Rocket Lab’s Launch Complex-1 in New Zealand, the world’s only private orbital launch site.
Rocket Lab, established in 2006, employs about 220, the majority in New Zealand.
Chief Executive Peter Beck, who’s considered a founding father of New Zealand’s developing space program, expanded operations to Huntington Beach about two years ago. A $75 million Series D round last year led by San Francisco-based Data Collective put it in unicorn status.
Rocket Lab has raised $148 million. Other backers include Khosla Ventures, Bessemer Venture Partners, K1W1 Ltd., Promos Ventures and Lockheed Martin.
Paragon Partners
Irvine-based Paragon Software Group Inc. expanded its partnership with Western Digital Corp. (Nasdaq: WDC).
The company’s file system drivers are now either embedded on select external Western Digital hard drives or available via download.
Hard drives use spinning disks to store and transfer data.
Paragon File System Link products help protect consumer stored data while delivering high-performance playback of high-definition video content, such as 8K and virtual reality.
Paragon’s offering acts as a Rosetta Stone of sorts, linking separate and distinct file systems. The technology allows smartphones, smart TVs and monitors, tablets, media players, routers and other equipment to communicate with storage media, giving consumers the ability to streamline content through any device from any storage-media format or file system, regardless of chip configuration or operating system.
Western Digital, which moved its headquarters last year from Irvine to San Jose, is the world’s largest drive maker, with annual sales exceeding $20 billion.
