Person to Watch – JIM PETERSON
The Business Journal’s pick of Microsemi Corp. Chief Executive Jim Peterson as a person to watch hit the mark.
Peterson, the affable leader of one of Orange County’s largest chipmakers, has the company primed to hit his $1 billion annual revenue goal, while positioning it for long-term growth, thanks to its strong standing in the aerospace, defense and satellite markets.
“There are fewer and fewer companies playing in these spaces,” said Rick Schafer, managing director and senior analyst of Oppenheimer & Co.’s semiconductor division in Denver.
Those business lines also bring higher margins, stable contracts and hold long lead times, mitigating competition, Schafer said.
Its products are built into satellites, commercial avionics systems, digital tele- visions, security scanners, wireless systems and other devices. Customers include Cisco Systems Inc., Boeing Co., Hewlett-Packard Co., Dell Inc. and Samsung Electronics Co.
The company, unlike some competitors, hasn’t struggled in the last year due to its concentration of defense-related work, which accounted for about 25% of its $835.8 million in sales in 2011. That segment is pegged to grow at a 7% or 8% clip this year, when some analysts had forecast a dip in the same range, according to Oppenheimer’s Schafer.
“[Peterson] made Microsemi safe, relevant and attractive again to investors,” Schafer said. “He deserves the lion’s share of credit for that.”
Microsemi bought key assets from Sunnyvale-based Maxim Integrated Products Inc. this year, effectively building on its $633 million hostile takeover of Canadian competitor Zarlink Semiconductor Inc. in October 2011.
The acquired products help speed up and deliver voice, data and multimedia traffic over wireless and land lines in communications equipment.
―Chris Casacchia
Company to Watch – SAGE SOFTWARE INC.
Our pick to keep a close eye on Irvine-based Sage Software Inc., the North American headquarters of Sage Group PLC in Britain, looks to be a winner, though we’ll get a clearer picture when the company soon reports its year-end financials.
Many of the initiatives launched under Chief Executive Pascal Houillon in the last year are still taking shape, but things seem to be trending in a positive direction.
The company began a rebranding campaign to make the Sage name more prominent on products, packaging and collateral material, as well as emphasizing newer products with growth potential.
Sage makes software that streamlines accounting, purchasing, payroll processing and other day-to-day tasks. It has about $600 million in sales.
“It was a tough call to make, and it’s still too early to tell if Sage will be able to truly reinvigorate its brand and its customers,” said Laurie McCabe, cofounder and partner of Massachusetts-based SMB Group, which tracks small and medium-sized businesses. “But I think it had to be done, and the early steps bode well.”
McCabe is optimistic that Sage’s renewed strategy on cloud-based software programs billed to improve management, as well as operational, financial and sales and marketing services, should help the company pick up market share.
“In terms of products, it’s difficult and expensive to do everything well,” McCabe said. “A more focused approach should pay off.”
―Chris Casacchia
5 Big Technology Stories
• Dell Inc. acquires Aliso Viejo-based software maker Quest Software Inc. for $2.4 billion. Former Chief Executive Vincent “Vinny” Smith cashes out shares, set for billionaire’s club.
• Sony Computer Entertainment Inc. buys Aliso Viejo-based Gaikai Inc. for $380 million, with plans to use its technology to create a cloud-streaming service allowing users to play “a broad array of content” on a variety of Internet-connected devices.
• Irvine-based Vizio Inc. launches first line of PCs, ultrabooks and laptops as it moves from a seller of flat TVs to a diversified consumer electronics company.
• Western Digital Corp. Chief Executive John Coyne, who guided the company through its recovery in flood-engulfed Thailand and oversaw its $4.3 billion buy of Hitachi Global Storage Technologies Ltd., announces his retirement.
• Santa Ana-based Ingram Micro Inc., the world’s largest technology distributor, acquires Brightpoint Inc. for $840 million, its largest buy to date. The Indianapolis company, which had $6.3 billion in sales in 2011, perennially competes for the title of world’s largest wireless device distributor.
