Irvine-based cloud services provider Zumasys Inc. has sold its cloud hosting, infrastructure and managed services business units to IT services provider NexusTek on undisclosed terms. Under the agreement, NexusTek acquires 50 employees and Zumasys retains its software and software development businesses.
Denver-based NexusTek provides desk, cloud, cybersecurity, consulting, server monitoring, VoIP, and Microsoft enterprise resource planning and customer relationship management software services. Zumasys acquired its managed services division in January on undisclosed terms from Irvine neighbor TCS Network Consulting. The division helps customers eliminate administrative overhead and related costs of managing cloud and IT systems. They receive round-the-clock monitoring and proactive responses to issues for a fixed monthly fee, according to the company.
Under the deal, former TCS President Keith Hermance took the role of senior solutions consultant, and Zumasys gained five employees.
The company employed about 85 before the divestitures, about 50 of them at its Spectrum headquarters.
Zumasys, established in 2000, posted revenue last year of about $30 million.
Sales in the global cloud-managed services segment are projected to grow from $27 billion last year to more than $53 billion by 2022, according to research firm MarketsandMarkets.
The deal marks the fifth buy in four years for NexusTek, which is backed by Abry Partners LLC, a Boston private equity firm that targets the media, communications, and information services sectors and manages more than $5 billion in capital in its active funds.
Alphabet Nests
Skyworks Solutions Inc., which is run from Irvine but designates its headquarters in Woburn, Mass., has notched another design win with Alphabet Inc. (Nasdaq: GOOG).
Its smart-home division, Nest, is utilizing several wireless connectivity products in its recently launched video doorbells. The Nest Hello, which offers continuous recording capability and high-definition video, incorporates Skyworks’ chip sets to connect users and other network devices, as well as extended range and battery charge for smart-home applications.
Data from Statista project global revenue from devices and services in the smart-home security market to hit $18 billion in 2020.
The latest development builds on a prior deal between the two companies in which Skyworks supplied chips used in Nest thermostats.
Skyworks (Nasdaq: SWKS) posted record sales of $3.7 billion in the 12 months through September, up 11% year-over-year. Net income of the Apple Inc. supplier topped $1 billion for the first time, compared to a profit of $995 million a year earlier—an enviable 28% profit margin.
Skyworks is OC’s third-largest chipmaker, with more than 400 local employees. Its Irvine operation has grown steadily in recent years, adding engineers, corporate personnel and department heads.
Broadcom Buy Puzzles
Broadcom Inc., which failed to acquire San Diego rival Qualcomm Inc., plans to buy software maker CA Technologies in an $18.9 billion cash deal.
Wall Street wasn’t impressed, investors sending Broadcom shares down 15% on June 12, the day after the deal was announced, to $207 and an $89 billion market cap.
The takeover comes as a bit of surprise, since New York-based CA Technologies specializes in enterprise software, a segment Broadcom has never competed in.
Broadcom (Nasdaq: AVGO) specializes in communications chips that power Wi-Fi, Bluetooth, GPS and other applications in mobile devices, as well as those used in data centers and set-top boxes.
The company still maintains a sizeable OC operation, though it’s shed more than 750 workers since Avago Technologies Inc. acquired Irvine-based Broadcom Corp. in 2016 for $37 billion.
Broadcom remains OC’s largest chipmaker by employment, with an estimated 1,630 staffers, though the true figure is likely lower. The company stopped providing local employment figures to the Business Journal after its sale.
In March, President Donald Trump killed Broadcom’s $117 billion unsolicited bid to acquire Qualcomm, citing national security concerns related to 5G development.
Word was that Qualcomm shareholders were leaning Hock Tan and Broadcom’s way before the executive action.
The Trump administration said they worried that if Broadcom acquired Qualcomm, it would invoke deep 5G research and development cuts. If that happened, it contended, the U.S. would lose the lead to China in the race for 5G supremacy, and in doing so compromise national security.
