Copyright © 2013 Albuquerque Journal
California-based LitePoint Corp. has acquired Albuquerque’s ZTEC Instruments Inc., a venture-backed, homegrown company that makes devices to test wireless electronics, such as cell phones, routers and GPS products.
LitePoint, which also makes wireless testing devices, is a wholly owned subsidiary of Massachusetts-based Teradyne Inc., a publicly traded supplier of automated testing equipment that reported $1.66 billion in sales in 2012.
LitePoint and ZTEC executives declined to discuss purchase price, but venture investors following the deal told the Journal that LitePoint paid in excess of $20 million to acquire the Albuquerque firm.
ZTEC will remain headquartered here, where it will expand operations, LitePoint Vice President for Marketing Brad Poston said.
“We think there’s huge market potential,” Poston told the Journal. “We’re not just interested in bringing ZTEC on board, but in really growing the company.”
ZTEC founder and former president Chris Ziomek said the workforce could potentially quadruple in two years.
ZTEC currently operates at an 8,000-square-foot facility in Journal Center. It employs 20 people here, and five more at a research and development center in Orlando, Fla.
“LitePoint will invest heavily in our organization here,” Ziomek said. “I expect the employee count to double a year down the line, and then double again within two years.”
LitePoint is looking for a new facility now in Albuquerque to grow ZTEC’s space by between 30 percent and 50 percent.
“The new location will give us space to double or triple the number of employees,” Ziomek said. “We also plan to triple the size of our research and design facility in Florida.”
Ziomek, who will stay on as general manager with LitePoint, originally launched ZTEC in 1996 as a custom engineering and consulting firm that made special testing instruments requested by manufacturers of wireless products.
Although the company reached nearly $2 million in revenue by 2002, it changed its strategy in 2003, transitioning from a services-based company to one that makes its own standard products for testing wireless electronics. That allowed it to scale up operations and continue to grow revenue.
The company carved an early niche for itself in the aviation and defense markets, counting companies like Boeing and Lockheed Martin as regular customers. But in the last few years, it’s moved into the broader consumer electronics area.
“That’s what got LitePoint interested in us,” Ziomek said. “We test the next generation of electronics going into mobile phones and tablets.”
LitePoint COO Brad Robbins said ZTEC is a good fit for his company because its testing devices are focused on the research and design stage of wireless products, whereas LitePoint provides testing capability at the manufacturing level.
“This enables easy correlation from design verification to high-volume production testing,” Robbins said in a statement.
ZTEC received about $3 million in private investment over the years, including about $2.5 million from the Verge Fund, said Verge Managing Partner Tom Stephenson. In fact, ZTEC was the first investment ever made by Verge, an early stage venture firm that formed in 2004.
The New Mexico State Investment Council is an investor in Verge’s first two funds, so the SIC will benefit from the ZTEC sale along with Verge’s other limited partners, Stephenson said.
“We’re getting back a good multiple on our initial investment,” Stephenson said. “It’s the type of financial returns we’re looking to see for our institutional investors. In addition, the company will continue to grow right here in New Mexico, so it’s a good story all the way around.”