Arbitech LLC, the Laguna Beach technology parts broker, just landed a big account,Fountain Valley-based Kingston Technology Co., the largest independent maker of computer memory products.
“Arbitech is an excellent fit, both in distributor focus and corporate culture,” said John Holland, vice president of domestic sales for Kingston.
Arbitech was founded by Torin Pavia, a 32-year-old entrepreneur who started the company as a pet project while studying at the University of Southern California’s Marshall School of Business.
(Pavia went to the University of California, Los Angeles, as an undergraduate.)
Arbitech puts a twist on the distribution of computer products. It uses arbitrage, a trading technique where a trader makes a profit from a buy in one market and a sale in another market.
Arbitrage long has been used in currency markets where traders buy and sell at favorable price differences. Pavia said he noticed that in computer products, resellers often have too much inventory that isn’t returnable. At the same time, other resellers need the product but can’t get favorable pricing from the big distributors.
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Jazz fab: joined trade group |
Arbitech finds resellers with an excess product, buys it and sells it for less than what a big distributor would charge. The company’s Web site boasts it can sell 11% cheaper than Santa Ana-based Ingram Micro Inc., the largest technology products distributor. But profits are slim. Arbitech makes a 5% margin on an average sale.
Jazz Joins Fab Group
Newport Beach-based Jazz Semi-
conductor Inc. joined the Fab Owners Association, a Cupertino-based industry group for chipmakers that own their own plants.
The association seeks to represent chip companies. It started in February, so it’s not clear exactly what it will do for its members.
After all, the group is missing a key chip plant owner: Intel Corp.
Besides Jazz, members include AMIS Holdings Inc.’s AMI Semiconductor, Cypress Semiconductor Corp., Delphi Corp.’s Delphi Electronics, Fairchild Semiconductor International Inc., Intersil Corp. and LSI Logic Corp.
The chipmakers represented in the Fab Owners Association have combined annual revenue of $7.5 billion.
Western Digital’s Outlook
Technophiles seem to be getting good news lately.
The latest: word from Western Digital Corp. that it projects better than expected sales and profits for the March quarter.
The Lake Forest-based disk drive maker said it expects sales of $900 million to $915 million, compared with an earlier estimate of $885 million to $915 million. The company now expects profits of $60.5 million to $64.6 million, up from an earlier estimate of $33.4 million to $39.6 million.
Disk drives are a harbinger of tech demand. When computer makers expect more orders, they buy more drives and other parts.
“Overall industry demand for hard drives in the traditional computing markets during the March quarter has been seasonal as expected but consumer demand trends have been better than anticipated,” said Matt Massengill, chief executive of Western Digital.
Collective, Backbone Combine
Newport Beach-based video game developer Collective Inc. is combining with Backbone Entertainment of Emeryville to create a new company based in Los Angeles.
The two companies plan to form Foundation 9 Entertainment Inc. Terms weren’t disclosed. Jon Goldman, Backbone’s chief executive, is set to run the new company.
Technically, the new company, called Foundation 9 Entertainment Inc., will be the sole shareholder of Backbone Entertainment and Collective.
According to a source familiar with the deal, the principals of Backbone and Collective will have an equal say in management.
“The two entities have approached the business combination as an association of equals going forward,” said Curt Barwick, an attorney with Higham, McConnell & Dunning LLP who worked on the deal.
Collective plans to continue operating as usual in Newport Beach, said Douglas Hare, the company’s vice president of production. The company is set to put out games under its own name as part of Foundation 9.
Collective has developed games based on movies and TV shows such as “Men in Black” and “Buffy the Vampire Slayer.”
Collective is making the game for the coming “Star Wars Episode III: Revenge of the Sith.”
The company makes games for video game consoles and computers. It counts about 90 workers, according to its Web site. The combination with Backbone, awaiting board and shareholder approval, is set to create a company with 300 workers.
Backbone produces games under two labels, Digital Eclipse and ImaginEngine. It has a game out for Sony Corp.’s new PlayStation Portable called “Death Jr.”
The combination with Collective is aimed at helping the two companies hold their own in an industry dominated by mega companies such as Electronic Arts Inc., Sony, Nintendo Co. and Take-Two Interactive Software Inc.
