Tech For Less, a homegrown technology company founded by Brad Taylor, Rick Parker and Robert Irwin one month after the Sept. 11 terrorist attacks, generates about $40 million in annual revenue, and has been acquired by ModusLink Global Solutions of Waltham, Mass. in an all-cash deal.
Taylor said the deal had been in the works for several months and represented a natural transition for the growing firm which had seen compounded annual growth of 14 percent since 2006.
“Our growth was always funded through reinvestment of profits, not venture capital or debt,” Taylor said, adding that throughout TFL’s growth, the company was “fortunate to be sandwiched between two growing and ever-changing market forces: technology product development and the Internet’s coming of age.”
“These market forces put wind at the back of TFL and propelled its growth,” he said, adding that the firm’s new owner brought considerable financial and marketing strength to the table.”
Taylor had only recently stepped down after assisting the company’s board of directors in finding new Tech for Less president and CEO Jason Lockwood who joined the firm last April after leaving a position as president and CEO at U.S. Playing Card.
TFL employs about 200 and operates from about 130,000 square feet in two facilities, including a headquarters building at 1610 Garden of the Gods Road. Lockwood said existing office and warehouse should be adequate for now, but admitted if growth continues at the current pace, it may look at additional space.
“It’s an exciting time for us. Our core business has come from individuals, but now as part of ModusLink, we may end up doing more on the enterprise side,” he said. Currently “a significant part of TFL revenues come from business electronics used by small to mid-size companies.
“Our strength has been that we can handle orders ranging from a $10 router to a $40,000 router switch used by telecommunications firms.”
The parent company’s outsourcing and technology services include four core competencies: supply chain, aftermarket, e-Business and entitlement management. The company operates more than 25 facilities in 14 countries.
For the fiscal year 2009, ModusLink reported about $1 billion in revenue, said company spokesman Bob Joyce.
ModusLink CEO Joseph Lawler said that currently one-third of the company’s business comes from domestic clients and the other two-thirds from international customers. Clients include some of the country’s most prominent consumer electronic manufacturers and service providers – companies like Cisco and Hewlett Packard.
“When consumers purchase new equipment, take it home and try it out, sometimes they find it’s not exactly what they need. If they return it, it is still in excellent condition but may need repackaging and remarketing. That’s a significant part of our business,” he said, adding that TFL provides ModusLink with a robust business-to-consumer asset recovery channel for technology products and capabilities.
Lawler also see significant financial upside with the TFL acquisition. “Tech for Less is an innovative business that will expand the value we bring to our clients. Aftermarket services is a very compelling space for [us] given its growth, financial characteristics and importance in the overall supply chain.
Of course it’s a great local story as well – and a testament to what Brad Taylor and the folks in Colorado Springs have been able to envision and to grow. For us the acquisition is primarily a financial story, but it was their ingenuity, their ability to build critical mass and their successful Web-based marketing that made them compelling,” he said.