A tiny California company has quietly shifted its headquarters to Stamford, as it searches for an acquisition candidate to replace its previous business selling embedded printer software.
Peerless Systems Corp. is leasing just 500 square feet of space at 300 Atlantic St. in Stamford, having previously been based in El Segundo, Calif., where it retains a small office. The building at 300 Atlantic St. also cleared up 6,000 square feet of space for the local office of Resources Global Professionals, an Irvine, Calif.-based subsidiary of Resources Connection Inc. that consults on a wide range of business management processes.
Founded in 1982, Peerless Systems built a business licensing source code that has been used by Norwalk-based Xerox Corp., Armonk, N.Y.-based IBM Corp. and an array of other printer makers.
Peerless developed a way to recognize objects on a page not unlike how the human eye does, picking out basic image elements such as text, lines and photographs; rather than attempting to process a collection of pixels as competing software programmers had attempted up to that point.
Peerless”™ software would then create a display list of image objects as an intermediate representation of the document to be printed, enabling complex imaging data to be processed more quickly, with less memory and without accompanying compression techniques that degrade an image”™s quality.
In its early years, Xerox and IBM accounted for about 40 percent of Peerless”™ revenue. The company hired former Xerox executive Edward Gavaldon in 1995 to lead it through an initial public offering of stock the following year; its chief technology officer at the time was previously a longtime IBM engineer.
As late as 2006, Peerless employed more than 100 people at its headquarters in El Segundo when sales totaled $36 million. That business has been whittled away since, first via the 2008 divestment of intellectual property to a Kyocera affiliate and then by virtue of an expiring contract with Adobe last year. Peerless continues to find license partners, however, reporting in April that it had entered into a new license with an existing customer from which it will see some $800,000 in fees.
Peerless earned $4.1 million in its fiscal year ending in January on just $6.2 million in revenue, with sales up from $4.8 million in its 2010 fiscal year.
Perhaps more key are the company”™s assets, which totaled $12.4 million in cash at the end of 2010, after repurchasing $43 million of its own stock last year. That gives it plenty of equity under its “PRLS” Nasdaq ticker to issue in any prospective acquisition, which Peerless said is its goal with few restrictions on an industry or geography.
Leading the acquisition hunt is CEO Timothy Brog, who has held the post since August, having previously served as chairman while a managing partner of Locksmith Capital Management L.L.C. and of E2 Investment Partners L.L.C., a special-purpose vehicle set up to invest in Peerless.
Before that, Brog spent stints with Pembridge Capital Management, the Edward Andrews Group and Skadden, Arps, Slate, Meagher, & Flom L.L.P.
