EMC Corp., the top maker of data storage computers, upped its stake in Orange County with an acquisition earlier this month.
The Hopkinton, Mass.-based company is paying $165 million for Irvine-based Avamar Technologies Inc., a maker of data storage software and devices and one of OC’s better funded startups.
The move is the latest by EMC to expand the software side of its business.
EMC’s other stake here is in Tustin-based MTI Technology Corp., a onetime competitor for data storage computers. EMC owns about 25% of MTI, which now resells computers and software from EMC.
Three years ago, EMC invested $4 million in MTI as part of a $15 million funding led by Boston-based private equity investor Advent International Inc.
EMC has spent $7 billion buying companies and assets in the past three years, capped by this year’s $2.1 billion deal for Bedford, Mass.-based RSA Security Inc.
The company has bought 12 businesses this year for a total of almost $3 billion.
The Avamar deal is expected to be completed by early December. Avamar is set to become part of EMC’s storage product operations group.
Ed Walsh, Avamar’s chief executive, is set to report to Mark Sorenson, head of EMC’s information management software unit.
Avamar’s software is used to eliminate redundant data, saving disk space on storage networks used by banks, corporations, Internet companies and others.
The company has raised more than $50 million in venture financing, including from Goldman Sachs, Morgan Stanley and CMGI Inc.
TTM Takes On Debt
Santa Ana-based circuit board maker TTM Technologies Inc.’s big buy has left it in debt.
TTM completed its buy of Tyco International Ltd.’s printed circuit board business for $226 million in the third quarter.
The company financed the buy with a $200 million, six-year loan and paid $26 million in cash, Chief Executive Kent Alder said in a conference call. TTM paid out about $8 million in fees related to the deal, which was announced in August.
The buy is huge for TTM. The Tyco unit did $383 million in sales last year, vs. TTM’s $274 million.
“The combination makes TTM Technologies the largest printed circuit board manufacturer in North America, with annualized sales of approximately $650 million,” Alder said. “We are now a leader in the attractive military/aerospace sector of the printed circuit board market and will provide expanded service capabilities to a more diversified customer base.”
Despite the debt, things are looking up at TTM (which stands for “time-to-market,” in case you had a bet going).
About 20 customers were added in the third quarter and the company expects the Tyco acquisition to add to profits within a year.
Third-quarter results were strong. Sales increased 24% to $76 million from a year ago.
Gross margins were unchanged at about 30% from a year ago because the company offset higher raw materials costs by raising prices.
Net income was $10.5 million for the third quarter, more than double from a year ago.
TTM has been working to get more “quick-turn” business,circuit boards made and delivered more quickly than they could be in Asia. Quick-turn work garners higher profits.
For the fourth quarter, TTM is estimating revenue of $140 million to $148 million.
TTM’s top five customers are Irvine’s Cisco-Linksys LLC, part of Cisco Systems Inc., Sun Microsystems Inc., Juniper Networks Inc., IBM Corp. and Hewlett-Packard Co.
Analysts prodded TTM executives on the prospect of closing plants in the Nov. 1 conference call.
The response was a non-answer: “We have been a combined company for all of three days, our first priority is to have a smooth and successful integration,” Alder said. “Our immediate objective is to improve the profitability of each facility.”
TTM has plants in Santa Ana, Redmond, Wash., and Chippewa Falls, Wis.
Powerwave Exec Joins Board
Camarillo-based Semtech Corp., a maker of analog and mixed-signal chips, appointed Bruce Edwards to its board, the company said late last month.
Edwards is executive chairman of Santa Ana-based Powerwave Technologies Inc., a maker of wireless tower gear. He’s served on Powerwave’s board since his days as chief executive a decade ago.
Before Powerwave, Edwards served in various management positions for 11 years at Irvine’s AST Research Inc., the former computer maker.
Edwards is filling a spot that opened in August when former Semtech chairman John “Jack” Poe stepped down during a stock options probe.
Poe was Semtech’s chief executive from 1985 to 2003.
Edwards is the latest new face at the company. Semtech got another board member, W. Dean Baker, in October; a new chairman, Rockell N. Hankin, in August; and a new chief executive, Mohan Maheswaran, in March.
