Business services firm Impact Networking made its commitment to the Los Angeles market final last week, purchasing Montrose-based Lance Allen Document Solutions, or LADS, for an undisclosed sum.
Chicago-based Impact will shift the newly acquired operations to a current office downtown and a warehouse in the Arts District.
The company said the LADS acquisition was part of a strategy to gain a toehold in the Southland as it looks to increase its overall growth.
“We wanted to break into the L.A. market because it’s the second-largest in the country,” Impact Chief Executive Frank Cucco said. “Our goal was to find a company like (LADS) and use its customer base as a way to cross sell our products.”
LADS has some 600 business customers in L.A. the companies said. The outfit offers mostly hardware, such as printers, whereas Impact also offers services such as cloud computing, consulting and branding.
Impact currently employs a total of about 450 people and has 15 locations, with revenue projected to surpass $100 million in 2017, according to Cucco. The deal for LADS gives Impact 16 total employees in Los Angeles.
“We’re still in our infancy as far as moving into L.A.,” Cucco said. “We plan to continue to increase our market share and continue to grow here.”
The deal took about four months to put together, Cucco and LADS Chief Executive Rick Powell said. Powell said he was looking to cut back his workload and eventually retire, and the Impact deal made sense.
Powell said it wasn’t quite as hard for him to cede control of the 50-year old company because he only took over in the last decade.
“I was well into my career before I bought the business,” Powell said. “So, it’s not really my baby. I don’t have as many nostalgic feelings as someone might have who built the business up from nothing.”
Intrepid on Billion-Dollar Deal
Intrepid Investment Bankers of Westwood helped medical imaging and diagnostics outfit Ambry Genetics Corp. land $1 billion from buyer Konica Minolta last week.
The deal includes an $800 million upfront payment to Ambry shareholders and another $200 million in incremental payouts based on certain financial benchmarks. Aliso Viejo-based Ambry will operate as an independent subsidiary of Tokyo-based Konica.
Intrepid Managing Director Adam Abramowitz said the valuation stemmed from a sale process that began at the end of 2016 and included multiple suitors. Abramowitz said Ambry’s position as a trusted genetic testing and diagnostic firm that has deep relationships with so-called genetic counselors – health professionals who help interpret genetic tests for potential hereditary diseases or conditions – gave the company cache that helped boost the sale price.
“Ambry has developed amazing trust and loyalty with genetic counselors and that is a very difficult market to enter,” Abramowitz said.
The genetic testing and diagnostics field is also seen as an area where there’s a huge amount of growth potential, according to Abramowitz. The vast majority of patients that avail themselves of these tests think or know they have some hereditary disorder or condition. As medicine moves more towards preventative care, Abramowitz said, more people will undergo genetic testing to determine their risk profile, increasing demand for services such as Ambry’s testing and diagnostic offerings.
“Genetic diagnostics is very much in the early innings of its development,” Abramowitz said. “It has a huge runway ahead of it.”
Billions Flying In
Intrepid wasn’t the only local player with the possibility of a billion-dollar deal.
Long Beach-based Virgin Galactic and two subsidiaries signed a non-binding memorandum of understanding with the Public Investment Fund of Saudi Arabia, which pledged $1 billion to fund the company’s space tourism ambitions with the option to invest $480 million more at a later date.
The investment will go to support Virgin Galactic’s human spaceflight plans and subsidiary Virgin Orbit’s manufacturing of a low-cost small-satellite launch system and commercial supersonic aircraft, Virgin Group said in a release. Virgin Group is billionaire Richard Branson’s venture investment firm and owns significant, though not always majority stakes, in various companies operating under the Virgin brand.
The Saudi investment in Long Beach’s Virgin Galactic and Virgin Orbit is part of a larger effort by the Middle Eastern country to add innovative industries to its economy, which is heavily dependent on oil drilling and exportation. The agreement includes the possibility of developing a space tourism industry in Saudi Arabia.
“This partnership with Virgin Group reflects the great strides the kingdom is making towards our vision for a diversified, knowledge-based economy,” Prince Mohammad bin Salman Al-Saud, the Saudi crown prince, said in a statement.
Have a deal tip? Henry Meier can be reached at hmeier@labusinessjournal or (323) 556-8321.
