LINDON — MaxStream, a wireless connectivity company in Lindon, has been sold for $39 million but won't be moved out of the state, company CEOs said Friday.
It was acquired this week by Digi International, based in Minnesota, after the company heads realized their goals, management procedures and product lines meshed flawlessly.
"It's a long-term growth opportunity," said Joseph Dunsmore, president and chief executive officer of Digi. "You just don't see very many companies in seven years (driving) ... top-line revenue growth while driving bottom-line profits."
Both CEOs said moving the company away from its Utah roots was never an option. Not only would it be a poor business move, but they would lose the talent and employment pools in the state, they said.
"We have a social responsibility to further advance economic development here," said Ron Heinz, executive director of Canopy Ventures, the group that initially financially supported MaxStream.
Digi was started in 1985 and is known nationally and internationally for its work with connections linking electronic devices. Consumers use Digi products in things such as vending machines, traffic lights or self-checkout machines at the grocery store, Dunsmore said. Digi creates the infrastructure so the devices can communicate with a central network.
MaxStream fits in flawlessly with those products, Dunsmore said.
The Utah company began in 1998 as a small nighttime project of three engineers — Nick Mecham, Hugh Nielsen and David Steed — who worked in an unfinished basement surviving on Kool-Aid and Nutter Butter cookies, said MaxStream CEO and President Brad Walters.
Walters then jumped on board and wanted to use $900 for an advertisement. The company had only $1,500 in its checking account but decided to buy the ad anyway.
The risk paid off — $20,000 in revenue that next month and the impetus to move the company forward.
The company was earning a profit by April 2002, thanks to $1 million in venture capital from The Canopy Group. In 2005, MaxStream generated $10.4 million in revenue.
One of the company's most lucrative products is a radio transmitter that has been used by the Utah Department of Transportation in connection with its electronic signs on I-15 in Salt Lake County, Walters said.
"We haven't crossed a finish line," Walters said. "We've crossed a milestone. This is success, but there's a greater success and (Digi will) take us to the next level."
The MaxStream name will remain in place for now, although the companies will be evaluating their brand strategy in the coming year.