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Friday, May 27, 2022

MERGER—Data Swaps Spur Tech Firm Merger

Seeking to capitalize on the market for digital content delivery, Westlake Village-based Medea Corp. has acquired Storage Concepts Inc. of Tustin in a stock-swap deal.

The deal, the value of which was not disclosed, brings together $25 million (annual revenues) Medea with $8 million Storage Concepts. The combined company wants to grow annual revenues to between $200 million and $300 million within five years by moving away from making content-storage hardware and expanding aggressively into content-delivery hardware.

Medea’s high-capacity components enable video editors, computer-game developers, animators and others who work with large amounts of digital data to store and manipulate their massive files. Medea’s products have been used in the creation of dozens of television shows and movies, including “Red Planet” and the two upcoming sequels to “The Matrix.”

Now, the company will be making components that allow such files to be transferred from place to place, rather than merely stored in an individual’s computer.

“The content-delivery marketplace is much larger than the content-creation marketplace, and it requires much larger systems in terms of the storage capacities,” said Roger Mabon, marketing director for Medea. “So we think we’re going to see some substantial increases in revenues via sales to the delivery market.”

Storage Concepts, which also produces digital hardware used in medical imaging, military, government and security applications, will continue to operate out of its Tustin facility.

“We have a direct sales channel that they wanted to take advantage of for their products,” said Martin Bock, Storage Concepts’ president, who has assumed that title at the combined company.

Medea was founded in 1996 by Mabon’s father, Stuart, who came out of retirement two years after selling his $400 million (annual revenues) Chatsworth disk drive firm, Micropolis Corp.

He joined with several friends and business partners to invest an undisclosed sum in launching Medea, while venture capitalists added another $1 million. Stuart Mabon remains chief executive of the combined company.

Medea still needs another $10 million investment, said company officials, adding that several venture capitalists are considering proposals.

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