A little more than seven weeks after PI Connections moved into its new facilities, the company was bought out by Intercell Corp. of Phoenix for 1.4 million shares of restricted stock.
The stock is valued at approximately $6.9 million.
Under the agreement, PI will become Particle Interconnect Corp., a wholly owned subsidiary of Intercell Corp. Intercell also will provide PIC with $1.5 million and additional funds as required to develop PIC’s manufacturing 45,000-square-foot facility in the Colorado Center at Mark Dabling and Drennan roads.
Larry DiFrancesco, former president of PI, is now executive vice president and chief operating officer of PIC. He has also joined the board of directors for Intercell.
Intercell is a high technology company that specializes in the commercialization of niche market electronic applications including electron tubes, proprietary shielded antenna systems for mobile communications equipment such as cellular phones, and, now, patented particle-coated substrates for integrated circuits.
The purchase of PI, which employs 35, provides Intercell with a manufacturing facility along with a revolutionary patented printed circuit board technology with huge potential. The technology is used in most integrated electronic systems, including computers and personal electronic devices.
"Once you get some money, the rest is easy," DiFrancesco said. With $250,000 in venture capital, PI incorporated in May.
PI relocated from Silicon Valley in July. What made PI attractive to Intercell was that it can manufacture 60 printed circuit boards an hour versus the industry’s one-per-hour norm. It then sells the boards to IC manufacturers and semiconductor companies.
The 13-year-old Intercell has been on a buying spree in the last year, acquiring the publicly traded Modern Industries Inc. in July 1995 along with its primary asset, California Tube Laboratory Inc. The acquisition gave the company its first manufacturing facilities along with the antenna system technology. This acquisition essentially took the company public and it is traded on the NASDAQ under the symbol INCE.
In August, Intercell announced an agreement to buy MC Davis Co. Inc. for $1.8 million in cash and stock. MC Davis has two manufacturing plants — one in Arizona and one in Mexico. The two plants manufacture power supplies, such as transformers, radio frequency coils, surface mount coils, and a wide variety of inductance products. When the deal closes this month, MC Davis will begin to manufacture the cellular antenna developed at CTL.
Intercell is projecting revenue from CTL will reach $15 million annually within four years. The company is already on its way with the June announcement of a $1.2 million order from the United States military for specialty electron tube products. The order increases CTL’s backlog to $2.8 million. The subsidiary will be moving into larger manufacturing facilities this month.
The antenna systems are projected to reach $18 million annually within four years.
PIC brings a backlog of $25 million in signed orders for its printed circuit boards that are primarily used in smart cards and computers. Intercell anticipates the production lines will be up and running within 90 days.