AUSTIN, Texas–(BUSINESS WIRE)–July 11, 2003–Austin Ventures LP and Staktek Corporation today announced a definitive agreement in which Austin Ventures will acquire Staktek Corporation in atransaction that is expected to close by the end of August 2003. Financial terms were undisclosed.
“We are extremely excited about our investment in Staktek, given its strong track record of growth and profitability, exceptional customer base, and outstanding management team. Those factors, along with its strength in the memory solutions market, position the company to capitalize on a number of opportunities in the semiconductor sector,” said Joe Aragona, a General Partner of Austin Ventures.
Clark Jernigan, a Principal of Austin Ventures who, along with Aragona, will join Staktek’s board of directors, added, “Since its founding in 1990, Staktek has repeatedly shown its ability to parlay core technology innovation, manufacturing process know-how and business model agility into a highly differentiated and market leading services offering for the top tier server vendors and their supply chains. We believe Staktek is very well positioned to capitalize upon and help drive future memory density technologies, and we look forward to being their partners in taking the company to the next level of financial success.”
Staktek Corporation is a pioneer in the design of memory stacking technologies and has been providing reliable high performance solutions to large systems vendors for over 13 years. Its Performance StakPak(R) product is the preferred choice for the highest memory configurations at the five largest server OEMs and is increasingly finding its way into other high-density memory applications, such as intelligent core routers and high capacity storage systems.
“This transaction is excellent news for Staktek’s customers and employees,” said Jim Cady, President and CEO of Staktek. “In addition to realizing value for Staktek’s current shareholders, the company gains an outstanding partner with whom we can continue to successfully pursue our business strategies. Austin Ventures has financed a large number of Austin’s high tech success stories and has a solid track record of helping management create value in their portfolio companies.”
In addition to funds provided by Austin Ventures, senior debt financing is being provided by Comerica Bank and Guaranty Bank. “The Staktek deal is significant for several reasons,” said Aragona. “While the market for private equity remains highly selective, it hasn’t vanished as some have suggested. Austin Ventures has funded over 15 new seed and early stage technology and service companies in the last 18 months and several more projects will be announced shortly. In addition, we are actively evaluating other later stage growth opportunities that exhibit the qualities of Staktek — namely seasoned management teams with a history of execution in large and growing markets. While other sources of private capital have retreated in this last cycle, AV has over $600MM available to continue our 20-year strategy of teaming with the best entrepreneurs in Texas.” Aragona added, “By teaming with our local partners Comerica and Guaranty, the Staktek investment shows that all the resources necessary to finance growth opportunities are available from within this region.”
About Staktek Corporation
Staktek Corporation is the leading provider of proprietary, high-density stacked memory solutions for original equipment manufacturers (“OEMs”), silicon manufacturers, memory module manufacturers and contract manufacturers. Staktek’s products support the rapid growth of electronic commerce and internet-centric applications by enabling a dramatic increase in the performance of servers, workstations, high-end computing platforms and packet switching networks (routers). Staktek’s high-density stacking solutions provide for increased performance through doubling or quadrupling of memory in the same physical footprint as the base components. Staktek currently has 59 patents covering its technology with an additional 11 patent applications pending. Staktek and its licensee Samsung grew their combined share of the high-density memory market to 74% in 2002 according to market size estimates from De Dios Associates.
Staktek is a privately held company, incorporated under the laws of the State of Texas in June 1990. Staktek is headquartered in Austin, Texas and currently has over 400 employees at its two manufacturing locations in Austin, Texas and Reynosa, Mexico.
About Austin Ventures
Austin Ventures has been working with talented entrepreneurs to build valuable companies since 1979. With $2.4 billion under management, AV is the most active venture capital firm in Texas, and one of the most established in the nation. With a focus on enterprise software, computer and communications hardware, and business services, Austin Ventures invests at all stages of company development, from $100,000 “planned experiments” to $50+ million investments in management buyouts.
