Irvine-based business software maker Kofax Inc. closed one mega-buy this month, and has another smaller deal in the works.
The company on Feb. 1 completed a $400 million acquisition of the document imaging division of Nuance Communications Inc. (Nasdaq: NUAN).
It’s the priciest deal in Kofax’s 34-year history.
The deal positions Kofax to become a leader in the manufacturing and sale of multifunction printers, which are office printers that combines other functions such as scanning, copying or faxing.
Nuance’s imaging unit provides software and advice to help companies maintain and automate control of those types of document processes. Companies often need such control to maintain compliance with information security policies and regulations.
Its subscription software is sold directly and through a global reseller network. Customers and partners include Xerox, HP, Canon and Samsung.
Nuance’s imaging business reported $219.7 million in its last fiscal year ended in September, down 2.2% year-over-year, according to an annual filing.
The unit accounted for about 10% of the Massachusetts company’s $2 billion in annual revenue.
Kofax will now have annual revenue approaching $600 million, which should place it among the 35 biggest private companies by sales based in Orange County.
And the top line has room to grow, as Kofax and Nuance have about 20,000 customers each.
The deal also adds applications that should bolster two of Kofax’s fastest-growing business lines: automated onboarding and accounts payable.
Its newest acquisition, announced on Feb. 4, builds on its legacy business of scanning software that streamlines information flow, eliminates paper, reduces costs and improves customer service.
Kofax agreed to pay $16 million for Israel-based Top Image Systems Ltd. (Nasdaq: TISA), a business process automation firm with U.S. operations based in Plano, Texas.
The deal’s scheduled to close in a few months.
Top Image posted revenue of $29.7 million in 2017, down 6.2% year-over-year, and a loss of $6.6 million.
The two deals are the first for Kofax under its Chicago-based private equity parent Thoma Bravo LLC, which acquired Kofax from Lexmark International in 2017 for an estimated $1.2 billion.
Put on Ice
Ice Energy has completed the first phase of its 21.6 megawatt energy storage contract with Southern California Edison.
A megawatt of energy can generally power 750 homes at once.
The Costa Mesa-based company has installed about 100 of its refrigerator-sized Ice Bear systems across SCE’s service territory. The product freezes and stores water at night when electricity prices are low, and uses the ice to cool during the day when rates are higher. The system resembles a traditional air conditioning unit and makes ice through a copper coil system that pumps refrigerant through stored tap water.
The commercial version of its product—the company’s main source of business to date—is typically placed on rooftops of buildings and integrated into air-conditioning systems.
The two-year, 13-phase project will ultimately have more than 1,200 Ice Bears in operation, providing the utility firm with greater flexibility to reduce electricity load during peak demand periods while delivering uninterrupted cooling for customers.
The project was funded through a $40 million investment last year by New York-based private-equity manager Argo Infrastructure Partners LLC and buoyed by a 20-year deal with SCE.
Under the agreement, Ice Energy will install and maintain the units through local contractors.
As part of the deal, Ice Energy secured a separate $20 million operating contract from Argo over a 20-year period.
Easing the state’s energy grid is a major concern for its three largest utilities: SCE, Pacific Gas & Electric and San Diego Gas & Electric.
Ice Energy last year tripled revenue to more than $15 million without tapping into what it sees as its biggest potential source of business—California homeowners and the residential market.
The Business Journal reported last year the company was planning to install 1,500 cooling systems on buildings in Irvine, Tustin and elsewhere in Orange County.
The mix helped co-founder and Chief Executive Mike Hopkins earn an Innovator of the Year Award last year from the Business Journal.
Hopkins left the company in late October to pursue other ventures.
The company has yet to hire a permanent replacement, with Marcel Christians and Alex Collins serving as co-chief operating officers.
