Presto Announces Purchase of La Mesa Internet Services Provider
Not all dot-coms are facing an uncertain future, desperately seeking cash and wondering if they can make this week’s payroll.
Earlier this month San Diego based BuyMore Product, a startup B2B computer equipment E-tailer, announced a second round of financing of $2 million from ColumbusNewport LLC, a Virginia-based capital investment firm.
That may sound like chicken feed to some Internet startups that are attracting 10 times that much, but the company’s bigger news, and one that distinguishes the 2-year-old firm from many of its Internet brethren, is that it’s just about breaking even.
CEO Fred Schlaffer said the reason for getting to this status in less than two years isn’t luck or rocket science, just no-nonsense business management.
“We grew in a more traditional sense,” said the 20-plus year veteran of the computer industry. “We got some revenues and grew a little, and then got some more revenues, and grew a little more. The secret is maintaining rigid cost controls on our overhead and other expenses.”
Using an initial round of about $500,000 in capital, BuyMore launched its Web site in February 1999 and attracted 27,000 hits in its first month. The site today commands more than 4.5 million hits a month, Schlaffer said.
From a two-person office, BuyMore has 22 employees today and expects to add another six by the end of the year. The jobs are mostly in programming, sales and administration. Sales by year-end should reach $10 million, with the firm’s sales just about matching its expenses, he added.
BuyMore’s story sounded intriguing enough to the folks at UCSD Connect to include the company in its annual Springboard luncheon on Aug. 10.
“We get about six minutes to tell our story, but it’s a pretty prestigious audience,” Schlaffer said.
So are BuyMore’s client list, a group that includes American Express, General Motors, Time Warner, Lockheed Martin, and San Diego based SAIC.
For more on the company consult its Web site at (www.buymoreproduct.com).
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Presto Gets Mas Largo: Presto Telecommunications Inc., a 5-year-old San Diego firm offering integrated telecom services in Mexico, announced the purchase of Lhynx International, Inc., a La Mesa-based Internet services provider earlier this month.
The price of the deal wasn’t disclosed by the privately held Presto, which was awarded one of eight Class A long distance concession licenses by the Mexican government last year.
With the acquisition of Lhynx, Presto gains extensive expertise in the Internet industry, and allows it to offer a broader array of services to its customers, said Presto executive vice president Nick Costas.
“We retained the five employees of Lhynx, and have hired five more in the last few weeks,” Costas said. The group will soon move over to Presto’s 12,000-square-foot Sorrento Valley office, and brings the total number of employees to 30.
That number could grow to 50 or 60, maybe more, by year’s end, Costas said.
Lhynx was the ISP for the Downtown La Jolla Business Improvement District, with some 1,400 members.
Costas described Presto’s business as “a carrier’s carrier,” providing services to other telecommunications companies as well as selling products like calling cards that are used in Mexico.
He declined to provide the company’s ownership or its revenues.
GERS Buys Dot-Com: San Diego based GERS Retail Systems, which provides integrated computer systems to retailers, purchased FurnishNet.com, a San Francisco-based B2B trading network for an undisclosed sum last week.
The acquisition is expected to deliver an integrated E-commerce network for retailers, manufacturers and suppliers, and result in increased revenues, increased efficiencies, and reduced expenses for all members of the supply chain, GERS said.
GERS, with 340 employees, most of whom work in San Diego, will retain FurnishNet’s eight employees, including founder Tim Morton. The smaller firm’s employees, now at two sites in San Francisco and High Point, N.C., will eventually transfer over to GERS offices in Sorrento Mesa.
GERS, a leading supplier of software tailored to the retail industry, has been in business for 27 years. It had total revenues of $57 million last year, a 47 percent increase from the prior year’s sales.
FurnishNet, founded last year, designed and maintained a network serving the home furnishing industry.
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Broadband Gets Second Round: Broadband Innovations Inc. said it lined up $11 million in investment funding led by Scientific-Atlanta Inc.’s outlay of $6.8 million. Other investors were Motorola, SBC Communications and Laurel Partners.
The privately held telecommunications and cable technology company said it plans to use the money for working capital to increase its manufacturing capability, and for R & D.;
Scientific Atlanta’s investment follows closely on the heels of a joint agreement between the parties for Scientific Atlanta to supply Broadband with components.
Keylime Gets Big Boost: Keylime Software obtained a $15 million investment from a group led by CB Capital, based in Portland Ore., and Kline Hawkes, based in Los Angeles. The 3-year old application service provider said the amount was the largest in the company’s young history and included a sum from San Diego based Sorrento Ventures.
Keylime has developed data collection technology that allows it to capture online visitor data more effectively, the firm said.
“Keylime’s service delivery model is exactly what the E-business community is shouting for: actionable information to drive Web strategy and increase return on investment with minimal intrusion on IT operations,” said Nick Memmo, partner at Kline Hawkes.
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PriceSmart Inc. To Open In PI: PriceSmart Inc., the warehouse chain operating stores outside the United States, formed a joint venture agreement to open five stores in the Philippines.
PriceSmart, which recently announced opening a slew of new stores in Guatemala, Costa Rica, the Dominican Republic and other Caribbean nations already has 22 stores, including five in Asia.
The Filipino investors with PriceSmart were identified as William Go and Robert See. The first location in Manila is scheduled to open in late summer of 2001.
PriceSmart was spun off from Price Enterprises in 1997 following the acquisition of Price Clubs by Costco. The stock has been trading between $32.68 and $49.25.
Peregrine’s Moores Steps Down: John Moores, 22 percent owner of Peregrine Systems Inc., the San Diego maker of business software, is stepping down as chairman of the company but will remain on the firm’s board of directors.
Taking Moores’ place is Steve Gardner, Peregrine’s CEO. Gardner will remain CEO, while Gary Lenz was appointed president and COO.
Along with these changes, Peregrine reported first quarter net of $12.1 million on revenues of $94.3 million, the latter up 83 percent from last year’s first quarter.