5 Big Stories
- Western Digital Corp.’s decision to quietly redesignate headquarters from Irvine to Silicon Valley highlighted the ongoing challenge of scaling public companies and keeping them here. Orange County has lost the headquarters designation of several blue chippers in the past few years, many were bought, but a few have sought a higher-profile geographic affiliation, notably Silicon Valley. The list includes Broadcom, Newport Corp., QLogic, Emulex, STEC and Multi-Fineline Electronix.
- Vizio Inc.’s proposed $2 billion sale to Chinese conglomerate LeEco collapsed in April. The fallout not only underscored the increasing difficulty of closing transactions between U.S. and Chinese companies, but led to two lawsuits and Vizio alleging its suitor’s real motives were neither a merger or joint venture. Irvine-based Vizio is seeking $110 million in damages, legal fees and other relief.
- Irvine-based Alteryx Inc. raised $114 million in net proceeds from a March initial public offering, snapping a nearly two-year drought in OC IPOs. The data analytics software maker is riding a hot streak, topping Wall Street expectations in its three quarterly earnings reports as a publicly traded company. Its share price has jumped more than 70% since the IPO to a market value of about $1.6 billion.
- Fountain Valley-based Kingston Technology Inc. surprised tech and finance insiders by joining forces with a consortium of global giants aiming to buy Toshiba Corp.’s flash memory business for $18 billion. The company best known for its ubiquitous flash and USB drives aligned with Apple Inc. in Cupertino, Boston-based Bain Capital, South Korean chipmaker SK Hynix Inc., Dell Inc. in Round Rock, Texas, and Western Digital rival Seagate Technology PLC.
The transaction would likely have deep ramifications in OC, home of major operations of Kingston, Toshiba and Western Digital, a joint partner in Toshiba’s flash business for more than a decade. Litigation is under way that could resolve several disputes over the sale and business line or potentially derail the deal.
- The development of OC’s cybersecurity hub, led by Irvine-based security software maker Cylance Inc., one of the fastest-growing local tech companies by revenue and employment growth. The cluster has been buoyed by the University of California-Irvine’s Cybersecurity Policy & Research Institute, as well as established private companies, including CrowdStrike Inc., SecureAuth Corp. and Susteen Inc., and some startups, such as Obsidian Security and Veracity Industrial Networks.
Honorable Mentions
• The ongoing boom in OC’s esports scene, led by Irvine-based Blizzard Entertainment Inc., which launched the Overwatch League this month at its new esports stadium at Burbank Studios; as well as Kington’s HyperX unit, which has sponsored more than 30 organizations and 90 teams.
• A pair of sales: Irvine-based Smartlabs Inc. was acquired on undisclosed terms by Richmond Capital Partners, a private investment firm based in Seattle. Smartlabs is the parent company of Insteon, an Internet of Things technology company, and Smarthome, a website that sells home-automation products. Smartlabs’ annual revenue exceeded $200 million. Insteon has worked on connected-home devices for both Apple Inc. and Alphabet Inc.’s Google.
And Irvine IT services provider Trace3, founded by entrepreneur Hayes Drumwright with $100 in his pocket, sold on undisclosed terms to private equity firm H.I.G. Capital. The value-added reseller has zoomed past $500 million in sales without an acquisition, a strategy that could change with the financial muscle of the new owner.
Next Week
Will OC lose more headquarters to Silicon Valley? Will all of its “natural ammenities” become a bigger factor in C-suite decisions?
— Chris Casacchia
