Lantronix Starts Expected Buying With Software Maker
Epicor Shows Signs of Life After Cuts; EMachines Rolls Out Gigahertz Models
TECHNOLOGY
by Andrew Simons
The buying has begun for Irvine-based Lantronix Inc.
The networking devices maker recently announced plans to acquire Redmond, Wash.-based Premise Systems Inc., a maker of building automation software. Lantronix said the buy stands to give it a foothold in the automation market.
“This acquisition allows Lantronix to capitalize on the expanding building and home automation markets,” said Fred Thiel, chief executive of Lantronix
Lantronix’s main products are known as device servers and allow companies to connect any electronic device to the Internet using existing connections. Normally when a company wants to link a device to its network,such as a bank hooking up an automatic teller machine,it must pipe in a costly high-speed line.
Lantronix’s Premise deal likely will be the first in series. Thiel has been feverishly filling the company’s war chest with a secondary stock offering that raised $48 million. The company also closed a debt deal with Silicon Valley Bank.
“We think this a very good time to look at acquisition candidates,” Steve Cotton, chief operating officer at Lantronix, said last year. “What you’ll see is us trending toward using less cash and more stock for acquisitions.”
The company’s stock has strayed some 41% from its high in July, giving the company a market value of more than $300 million last week.
The technology behind the Lantronix devices was a long time coming. Founded in 1989, Lantronix came out early with a device that connected a terminal to a company’s local network.
The company built on the technology and eventually came out with a new line of servers,called print servers,that let users access any printer on a network from any computer.
As the Internet grew in the 1990s, Lantronix sold more of its print servers and began to find new uses for its technology, which resulted in the company introducing a standard device server in 1998.
Cutting to the Core
Things seem to be looking up so far this year for Irvine-based Epicor Software Corp.
The maker of accounting and other business software recently said that it expects a 20% rise in fourth quarter license revenues from the third quarter. That’s up from an earlier projection. Epicor’s results are due Feb. 5
Epicor’s stock still is in the basement at about 2.50 last week. But the company’s shares have been on a marked uptrend since November and have more than doubled. Epicor hit a 52-week high on Jan. 11.
The company also plans to take a $2 million charge in the recently concluded quarter to pay for a 15% reduction in its workforce and other cost cutting. Senior managers also are taking a 5% pay cut. Epicor said it expects to hit quarterly savings of $3 million to $4 million as a result of its efforts.
EMachines Still Going
Irvine-based eMachines Inc., which went through a management shift and internal turmoil earlier this year, has launched a new line of computers starting at $399.
But these computers aren’t the lowest line of processors like my now-ancient 600 megahertz processor at home. These machines have one of the brand-spanking new 1 gigahertz processors. If you jack up the price to $799, you also can get a bigger drive and a compact disc burner installed with it. All of the new systems feature Microsoft Corp.’s newest iteration of its Windows operating system, Windows XP.
EMachines has fallen on tough times after its initial public offering about two years ago. The company got stuck in a downdraft of falling computer prices. After its founding chief executive resigned, the company struck a definitive merger agreement with EM Holdings Inc., a corporation owned by eMachines director Lap Shun “John” Hui. The takeover offer had been held up amid some legal wrangling but is in the works.
EMachines recently was named the second-largest vendor of desktop personal computers sold through retail outlets.
Irvine Sensors Awarded
Say what you will about quiet little Irvine Sensors Corp., the company just landed five research awards totaling $1.8 million recently. The company just was notified it received the Small Business Innovation Research awards.
“The SBIR Program sponsors the development of technologies of interest to the government that also have commercial prospects,” said Robert Richards, Irvine Sensors’ chief executive. “Because of this, these pending grants are significant not only to our current fiscal year, but potentially to our future. We will have more to say on the commercial demonstration objectives of the phase 2 awards once the procurement activities are completed.”
