In the last two weeks, there have been a couple of high multiple exits that share something in common - both LANDesk Software and Savi Technology started life as unwanted children inside much larger companies. LANDesk, an early-stage Corporate IP Spinout of Intel in November, 2002, was acquired by Avocent on April 27 for $476M ($416M plus $60M earnout). Savi, which was spun out of Raytheon in 1999, was acquired by Lockheed Martin on May 4 for undisclosed terms (SiliconBeat's Matt Marshall reported it as a $400M exit).

I know LANDesk quite well ... I was at Intel while this software business was getting milked by a semiconductor parent that never could quite figure out how to separate LANDesk's market opportunity as a stand alone software business from its muddled role as a "Job 1" (read - sell more Pentiums!) enabler. But after fumbling with this for the better part of 10 years, Intel made what now looks like an extremely savvy move - they spun LANDesk out as a new company with Intel retaining a 15% equity stake. They get $65-70M for something they had essentially run into the ground. I also know LANDesk since my firm - Blueprint Ventures - invested in the first and only round of outside capital raised by LANDesk. I don't have any first hand knowledge of Savi, but just like LANDesk and many other non-strategic businesses trapped inside big companies it likely suffered the usual litany of benign neglect, unwanted "help" from various corporate suits, and being forced to pay a corporate overhead "tax" for which it got little benefit. The result was that both LANDesk and Savi prospered as independent companies - that is, once they were allowed to raise outside capital, create an independent governance structure, and free to pursue market/product strategies that optimized their respective businesses.

If you work at, or are a shareholder in, either Avocent or Lockheed Martin, you can hope these proud new parents can help their new children grow and prosper. If you're at any other corporation that has a few non-strategic projects or businesses or those that look promising but just don't "move the needle" (what corporation DOESN'T have these?), then you should consider a spin out as a way to monetize this stranded IP.— Jim Huston

Jim Huston is a Managing Director with Blueprint Ventures, an early stage technology venture capital firm which specializes in helping corporations monetize their IP via early stage corporate IP spinouts.

Join Corporate Dealmaker's LinkedIn forum