Acacia Research Corp.’s patent-buying spree in 2012 helped the Newport Beach-based company hit record revenue and profits last year.
Some analysis from its recently released annual report highlights how the company’s aggressive move into the medical device sector—as well as a shifting strategy to own patents outright rather than licensing them for others—is paying off.
Acacia generated $41.2 million, or 16.5% of its $250.7 million in revenue last year, from its portfolios in the medical tech industry. That was up from $8.6 million, or 4.7% of its total revenue in 2011.
Chief Executive Paul Ryan told the Business Journal last year he began targeting medical and diagnostic companies for growth in 2011.
“It could become half of our business,” he said at the time.
It will bear watching if medical tech becomes a larger piece of the revenue pie this year.
The shift to buying medical technology portfolios was part a larger acquisition strategy that saw the company pour $328.3 million in patent buys last year, up 2,133% from 2011.
Its $160 million purchase of Adaptix Inc. in early 2012 offered an indicator of future plans. The deal for the Dallas-area company bolstered Acacia’s portfolio of patents on 4G wireless technology, adding revenue immediately and boosting margins, according to analysts.
That deal and another cemented in October with Massachusetts-based Boston Scientific Corp., which brought more than 1,900 patents and applications, boosted the number of patent portfolios Acacia holds to 250 in 2012, up from 200 a year earlier.
The company said in its annual report that 143 of those portfolios are generating licensing revenue, up from 112 in 2011. That helped increase net income to $59.4 million, up 181.5%.
The push to own more portfolios also lowered licensing royalties to inventors and contingent legal fees to $50.6 million, down 45% from 2011.
Nice Alternative
Alternative Technology Solutions Inc. is planning to double its work force this year to more than 100 employees, based on growing demand for its cloud services.
The company, which debuted at No. 16 on the Business Journal’s list of fastest-growing private companies in October, specializes in ERP and CRM services that help manufacturers implement business software from Epicor Software Corp. more efficiently.
“We’re really good at servicing our Epicor customer base and building products around Epicor solutions,” said Chief Executive Vivian Keena, who launched Alternative in 2008 after working as an executive at Epicor, where she handled product delivery in the U.S. and Latin America for the company when it was based in Irvine.
Epicor moved its headquarters to Northern California after it was acquired in 2011 for $976 million by London-based Apax Partners LLC.
Alternative counts more than 700 clients on its roster, including Synventive Molding Solutions in Massachusetts and Lake Forest-based Mexican fast-food chain Del Taco LLC.
It targets companies with $25 million to $500 million in annual revenue.
Alternative posted sales of $8.8 million in 2012, up 78% from a year earlier.
The projected growth has prompted Keena to look for office space to accommodate 250 to 300 workers for a possible move later this year.
The company has been in its 3,000-square-foot headquarters run by Aliso Viejo-based TechSpace for the last three years.
Most of the planned hires at Alternative are pegged for the company’s growing Salesforce.com consulting division.
InXile on Money
It didn’t take long for Newport Beach-based video game maker InXile Entertainment to raise its goal of $900,000 on Kickstarter.
The company raised more than $1 million within hours of launching its March 7 campaign on the crowd funding site. The proceeds are earmarked to hire engineers and developers working on its anticipated release of the role-playing game Torment: Tides of Numenera.
The company as of late last week has raised more than $2.1 million from nearly 39,000 backers who get a preleased version.
This is the second time InXile has gone to Kickstarter to bypass the traditional developer-publisher business model. Last year it raised more than $2.9 million for its post-apocalyptic Wasteland 2, a predecessor to the popular Fallout computer game series.
InXile Chief Executive Brian Fargo gained industry acclaim in the 1990s when his Interplay Entertainment became a top seller of PC games such as Bard’s Tale, Fallout, and Wasteland, which was published by Redwood City-based Electronic Arts Inc., one of the industry’s largest companies.
