Government Consultant TekInsight Completes Deal, Becomes DynTek
SSP Raises $2.5M Through Notes Sale; Micro General Cuts Off Long-Distance Unit.
TECHNOLOGY
by Andrew Simons
Irvine-based TekInsight.com Inc. has acquired the state and local government consulting business of Reston, Va.-based DynCorp. In the process, TekInsight has adopted a new name, DynTek Inc.
The deal ends months of negotiations,the combination first was proposed back in April. DynTek, which serves as a technology consultant to governments, plans to keep its Irvine headquarters and trade as DYTK on Nasdaq.
“DynTek has the broad range of services, extensive geographic coverage and industry knowledge needed to be a major player in the state and local government sector,” said Steve Ross, DynTek’s chief executive.
DynTek said it stands to have annual sales of $100 million and employ about 400 people after absorbing DynCorp Management Resources, the former DynCorp unit. DynTek said it is looking to expand in the new year.
“DMR has built a strong base of outsourced program management expertise over the past five years,” said Paul Lombardi, DynCorp’s chief executive. “This merger will take that business to the next level, providing the company, its customers and its employees with enhanced service offerings and significantly expanded markets.”
DynCorp gains a 40% interest in the new company as a result of the combination. For the quarter ended Sept. 30, what’s now DynTek counted sales of $11.6 million, up 43% from the year-ago period. The company lost $1.6 million, vs. a $2.2 million loss a year ago.
SSP Lands Funding
It may be hard to do right now, but Irvine-based transaction security company SSP Solutions Inc. found a way to do it,get funding that is.
The company has secured $2.5 million through a private offering of subordinated convertible debentures. The bonds have a three-year term and include provisions for both automatic and voluntary conversion into the company’s common stock. Initially, the debentures are convertible at $3.60 per share. The note purchasers were granted certain registration rights with respect to the securities issuable upon conversion of the notes.
Note purchasers include SSP’s co-chairmen and co-chief executives, Kris Shah and Marvin Winkler, and Richard P. Kiphart, a principal of William Blair & Co.
The company plans to use the money to expand its marketing and sales efforts while using some of it for day-to-day operations.
Linksys Debuts New Router
Networking gear maker Linksys Group Inc. recently took the wraps off a new router, a networking device that directs data traffic and allows for multiple secure connections to high-speed networks.
The router allows one office to securely link with another office via the Internet using an industry security standard called a virtual private network. The company is touting the new product as a way for small and midsized companies to communicate with remote offices without having to travel.
“Linksys is addressing an important need that has been recognized with their success of routers in the home and SOHO market,” said Mike Wolf, an analyst with market researcher Cahners In-Stat. “Conducting more business remotely is likely to increase productivity, decrease travel and open up information to share amongst all employees globally.”
Division Cut
There may have been high hopes for LDExchange, a wholesale international long distance business, but Santa Ana-based Micro General Corp. recently said in plans to axe the division. Micro General acquired LDExchange in 1998.
The company said the LDExchange has been unable to get into the black in the difficult economic times. The move will allow Micro General to focus on its core business, selling process software to the real estate market.
“This action reflects our drive to strategically position Micro General as a pure software services company and the number one provider of software services to the real estate settlement services market,” said John Snedegar Micro General’s chief executive. Micro General expects to report a one-time charge of $4.5 million to $5.5 million as a result of the move.
Chips Still Down
A recent report from San Jose-based Semiconductor Equipment and Materials International showed orders for semiconductor gear at $612.3 million in November, down 5% from October. November billings were at $842.2 million, down 6% from October, and 65% below November 2000’s $2.42 billion figure.
“North American suppliers of manufacturing equipment for the semiconductor industry continue to see orders drop on a monthly basis, reflecting the decline in global electronics production, excessive amount of existing manufacturing capacity and curtailed investment by the world’s chipmakers,” Stanley Myers, SEMI’s chief executive, said in a statement. “However, the rates of decline for both billings and orders have lessened in recent months compared to the steeper descent earlier in the year.”
