Two blockbuster sales and the return of tech star Palmer Luckey grabbed big headlines in an overall strong year for OC’s diverse technology sector.
Meanwhile, OC further cemented its role as a hub of the videogame world. And top tech firms looking for new sources of funding didn’t have to look too hard.
Here’s an overview of the top five stories in the key local industry:
Microsemi Shake-Up
Aliso Viejo-based Microsemi Corp. was sold in May for $10.3 billion to rival Microchip Technology Inc. in Arizona.
That same day Chief Executive James Peterson and several of his top executives were ousted by Microchip Chief Executive Steve Sanghi.
Peterson, who cashed out $22.2 million after the Microsemi sale, used some of the proceeds to establish private equity firm Peterson Capital Group, which took a minority stake in Irvine-based networking equipment maker Lantronix Inc. in August.
Bad blood between the former Microsemi execs and current management team at Microchip boiled over in October, when Peterson and three of his former executives sued Microchip and its executives for alleged slander, libel and unfair business practices.
Cylance Sale
Blackberry Ltd., which birthed the “crackberry” craze at the turn of the decade, wowed Wall Street and other industry watchers with a field-clearing $1.4 billion cash bid last month for Irvine-based software security provider Cylance Inc.
The transaction, which has been approved by the boards of each company, is expected to close by March.
Fast-growing Cylance, one of the most trusted names in cyberattack prevention, had been linked as a takeover target for months, though not to Blackberry specifically.
Its products are used to protect more than 15 million internet-capable computer hardware devices for over 3,500 subscribers, including Dell, Gap Inc. and Panasonic Corp.
Esports Expanding
OC has cemented itself as a global player on the esports circuit. The latest level up: Fountain Valley-based Kingston Technology Co. winning exclusive naming rights through 2020 to Allied Esports’ global flagship property at the Luxor Hotel & Casino in Sin City, newly minted as HyperX Esports Arena Las Vegas.
The Esports Arena made a splash in 2015 with the first dedicated gaming venue in North America in downtown Santa Ana. A multimillion-dollar investment last year by Beijing-based Allied Esports, which took a majority stake, fueled an expansion into Las Vegas and Oakland.
Esports Arena co-founder Paul Ward, who left the company after the investment, launched a $20 million venture capital fund in June dedicated solely to esports.
Blizzard Entertainment Inc. in Irvine played its part, as well, with the successful launch of the Overwatch League at Burbank Studios.
Funding Rounds
Call it a good year for raising funds, strategic buys and exits.
While Microsemi fell to consolidation, it was the only large local publicly traded tech company to come off the big boards last year, a departure from previous years.
Big funding rounds and deals dominated headlines this year:
• Obsidian Entertainment Inc. in Irvine and InXile Entertainment Inc. in Newport Beach were acquired last month by Microsoft Corp.
• Aliso Viejo-based IT services provider UST Global Inc. received a $250 million investment in June from Temasek Holdings Private Ltd., Singapore’s state-run investment fund.
• Kingston was part of a consortium that acquired Toshiba Corp. lucrative flash memory unit in June for $18 billion.
• In the same month, Cylance raised $120 million in a venture round led by prior investor Blackstone Tactical Opportunities.
Luckey Strikes
Palmer Luckey, the tech wunderkind who founded Oculus VR, returned to OC for his second act with defense technology startup Anduril Industries Inc.
The secretive Irvine-based firm, launched in June 2017, setting up shop at 2722 Michelson Drive in a 155,000-square-foot building a few blocks from the airport.
Luckey, a Long Beach native who owns a home in Newport Beach and a marina in Huntington Beach, left Facebook last year, a few years removed from Oculus’ $2 billion sale to the social network giant. The deal boosted him to one of OC’s wealthiest individuals, ranked at 25th on this year’s Business Journal list with estimated wealth of $800 million.
Anduril’s lead investor, Founders Fund, is headed by billionaire Peter Thiel, led a $41 million funding round in May.
— Chris Casacchia
