ACQUISITION: Acacia Research returns to OC with buy of Irvine’s Printronix

TECHNOLOGY: Says printer co. has ‘high potential’

Acacia Research Corp. (Nasdaq: ACTG), once valued at nearly $2 billion when it was based in Orange County but now headquartered in New York with a smaller valuation, has come back to OC for its latest acquisition.

The company, at one time a patent licensing and intellectual property firm based in Newport Beach and previously the largest investor in local artificial intelligence media firm Veritone Inc. (Nasdaq: VERI), this month bought Irvine industrial printing and related products company Printronix Holding Corp. for $33 million.

The deal is an example of Acacia’s new corporate strategy, one focused on acquiring what it calls “undervalued businesses” in mature technology, life sciences, industrial and certain financial services segments.

Printronix, based in Irvine, is a maker of industrial printers and printing supplies for manufacturers and retailers for what it calls “high reliability and low-cost printing.” The company also provides service and parts.

Printronix services customers that operate across healthcare, food and beverage, manufacturing and logistics and other sectors.

It provides a variety of services such as printing on unusual sizes and shapes and harsh environments such as extreme heat, humidity, cold, and dust, Acacia said.

“The acquisition of Printronix aligns with our strategic focus on acquiring high-potential businesses that can effectively leverage Acacia’s significant capital resources and operational expertise,” Acacia Chief Executive Clifford Press said at the time the deal was announced.

The purchase price represented a multiple of approximately 3.6 times the adjusted EBITDA generated by Printronix in the fiscal year ended March 31.

1974 Start

Printronix, established in 1974, is one of Orange County’s older tech companies.

The Irvine company was publicly traded for 28 years before it went private in 2008 in a $108 million buyout by San Francisco private equity firm Vector Capital. It had roughly $130 million in annual sales in 2007 and hasn’t disclosed financials since.

Printronix CEO Werner Heid said he sees Acacia as “the best partner to support our evolution.”

“This acquisition gives Printronix the opportunity to pragmatically expand our offerings as we continue to serve our loyal customers, provide customized solutions, and enhance our capabilities to meet their emerging industrial printing solution needs,” Heid said.

Heid took over the top spot at Printronix in 2015.

Veritone Ties

Acacia bought Printronix from N.Y.-based holding company Evercel Inc. (OTC Pink: EVRC), which said it had sold its 80.1%

stake in the Irvine firm on Oct. 7 for approximately $30 million.

Evercel had invested approximately $18 million for its equity stake in Printronix in 2013.

Shares in Acacia (Nasdaq: ACTG) were trading around $5.71 apiece as of last week, and have seen a more than 40% rise since the start of the year; it sports a roughly $285 million market cap.

Founded in 1993, Acacia was first known for buying patents and then demanding licensing fees from potential users, saying it was the world’s largest third-party patent licensing company. Critics called Acacia “a patent troll.”

Its shares in 2011 reached $45 each, giving it a $1.9 billion market cap at the time.

Its valuation also rose on the initial fortunes of Veritone, another local firm which went public in 2017 and for a while had a valuation over $1 billion.

Acacia was Veritone’s largest investor at the time of the IPO, but no longer is among the company’s top institutional investors, according to regulatory filings.

Acacia shifted its business model in the third quarter of 2016, when it made two convertible $10 million loans and took its equity stake in Veritone, which moved its headquarters designation from Costa Mesa to Denver early this year.

In 2018, Press was part of an activist proxy battle to change Acacia’s management. A year later, he became CEO and reached an agreement with investment adviser Starboard Value

LP for access up to $400 million of new capital for investments and acquisitions.

Acacia’s headquarters, previously in Newport Center, are now a block away from Starboard Value’s in New York City.

Press predicted that 2021 would be a busy year for acquisitions for the company.

“We intend to acquire operating companies, divisions or other assets where we believe we can realize significant value following an operational or strategic restructuring,” Press said last November. ■