Defense Budget Funds Sparks Irvine Sensors Rally
Vision Solutions Battling Takeover; DPAC Inks Mystery Deal
TECHNOLOGY
by Andrew Simons
Look at Irvine Sensors Corp. go.
Shares of the Irvine-based company have surged since the middle of March, thanks, in part, to the 2002 Defense Appropriations Bill, which the company says should steer about $3.5 million more in spending its way this year.
Irvine Sensors noted that the defense bill specifically taps the company for further development of its cameras, image processors and routing devices using its chip stacking systems.
Shares of the company have doubled, climbing from 77 cents on March 12 to 1.54 at a recent check.
Despite facing a number of class action lawsuits for allegedly misleading investors and artificially inflating its stock, Irvine Sensors has released a string of pretty good news lately. Earlier this year, the company said it was working on a so-called “super router” that boosts Internet speeds by cryogenically freezing the electronic switches inside the router’s circuitry. (The idea is that the colder electronic signals get, the faster they go.)
The company has also entered into the second phase of a $728,000 contract with the Army for the development of a miniature night vision weapons sight for use by troops. The sight provides more accurate targeting by detecting heat. The day the news came out, the company’s stock jumped some 27%.
Not bad for a company that saw about $148 million of its market value vanish over the past year as the company had difficult financing some of its research efforts. Last year, the developer of chips and other electronics saw the bankruptcy of its once-promising Silicon Film Technologies unit, which offered a canister that turned film cameras into digital ones. The unit’s technology sparked investor interest, but Irvine Sensors couldn’t get it up to volume production.
The company’s core offering,stacked chips that pack a lot of punch in tight spaces,looks good on paper. The company counts government, aerospace and wireless customers, but only $10.7 million in sales last year.
Drama at Vision Solutions
Irvine-based Vision Solutions Inc. is in the middle of an international hostile takeover battle involving its parent, South Africa-based Idion Technology Holdings, and Toronto-based DataMirror Corp.
After Idion’s board rejected an acquisition bid from DataMirror, Idion’s Chief Executive Nicholaas Vlok held up new Vision Solutions software that allows companies to integrate data from various corporate networks as an example of why shareholders should reject the takeover bid.
“It is interesting that a rival company sees more value investing in our technology than in their own,” chided Vlok. “I can understand why, but do DataMirror investors also understand?” He said Vision Solutions has invested heavily in the software.
A full shareholder vote is scheduled for May 26.
Idion says DataMirror’s offer,a 70% premium for Idion’s shares,undervalues the company. DataMirror has a 16.7% stake in Idion, which trades on the Johannesburg Stock Exchange.
Despite professing optimism that it will be successful, DataMirror faces a tough fight. Idion says that a block of shareholders representing nearly 44% of Idion’s stock, including management and the board, have pledged to kill the deal.
Idion has a lot vested in its Irvine unit.
When Idion acquired Vision Solutions in 2000, some high-level Idion officials balked at the $62.5 million price Idion was paying, calling it too high.
At the time, Idion director Marius Vlok, the father of chief executive Nicolaas Vlok, complained about the price and resigned his position. Quarreling with his son, he questioned whether Idion should buy Vision Solutions at all, a decision the younger Vlok defended. Nicolaas Vlok took over chief executive duties at Vision Solutions.
DPAC Chips Deal
Garden Grove-based DPAC Technologies Corp. says it has an unnamed buyer for $850,000 of its stacked memory components. DPAC said that a “leading network equipment manufacturer” wants the gear, but won’t disclose the company’s name. Of course, when companies say things like that, names like Cisco Systems Inc. and Nortel Networks Inc. spring to mind, but for an $850,000 order, it’s hard to say who the customer is.
DPAC says it competed hard for the deal.
“The customer considered several options when designing this product and selected DPAC Technologies because of our ability to help them achieve the memory density necessary for this cutting edge product,” said Chief Executive Ted Bruce.
DPAC makes electronic components that mount on silicon boards inside networking equipment, such as switches and routers. The components are comprised of chips stacked tightly to improve performance in a smaller space.
Go2 Goes Local
Irvine’s Go2 Systems Inc. is hoping its new Local Business Registry makes it easier for small- to mid-sized customers to register their business for its directory, which is accessed through cellular telephones. The company said that VeriSign Inc., a domain-name registration company, will sell its directory, making it easier for smaller businesses with just a handful of locations to be listed on the wireless service.
