Corrections or additions?
These articles by Kathleen McGinn Spring and Barbara Fox were prepared for the August 7, 2002 edition of U.S. 1 Newspaper. All rights reserved.
Life in the Fast Lane
In a relentlessly brutal climate for telecommunications,
it appears that one Central New Jersey player has pulled off a win.
Princeton Lightwave (PLI), a three-year-old company born in Sarnoff’s
labs, has bought time to wait out the telecom drought through a sale
of some of its assets to the TRUMPF Group, a multinational, privately-held
company based in Ditzingen, Germany.
At the same time, TRUMPF Photonics, a new company, banking on growth,
has arrived in Cranbury.
Louis Wagman, formerly chief operating officer of PLI, has been named
vice president and general manager of TRUMPF Photonics. A wholly-owned
TRUMPF subsidiary, the new company was formed to manufacture industrial
semiconductor lasers in the facility in which PLI will continue to
develop and market optoelectronic components and subsystems for the
"This deal is favorable for all parties," says Wagman, who
was brought in by Sarnoff as a consultant some three years ago to
set up Princeton Lightwave as a free-standing company. He began talks
with TRUMPF some 10 months ago. The deal closed on July 17.
"The trend in telecommunications, because of the difficult market,
has been to become fabless," says Wagman. "That was PLI’s
strategy and the basis for this transaction. To be `fabless’,"
he explains, is to develop and market technology, but to subcontract
the manufacturing to someone else. From now on, TRUMPF will manufacture
PLI’s products — chips the size of an underweight grain of rice
— as well as its own products.
In addition to taking over PLI’s manufacturing plant on Route 130
South in Cranbury, TRUMPF has acquired the intellectual property it
needs to turn out its semiconductor lasers. This intellectual property
includes technology Princeton Lightwave brought with it from Sarnoff,
which retained an interest in the company, and technology it has developed
since establishing itself as an independent company. TRUMPF purchased
PLI intellectual property that relates to industrial and some medical
products, while PLI retains intellectual property that relates to
As for human assets, TRUMPF has hired 21 of PLI’s 38 employees, while
17 employees will stay with PLI. Didier Le Lannic, the third CEO PLI
has had in its short life, remains in that position.
Wagman will oversee day-to-day operations at TRUMPF Photonics. He
reports to Peter Leibinger, president of the newly-formed company,
and chairman and CEO of TRUMPF’s North American operation, which has
headquarters in Farmington, Connecticut.
Photonics is a new field for TRUMPF, a company with 5,500 employees,
$1.09 billion in annual sales, and roots in old economy manufacturing.
Leibinger’s father, Professor Berthold Leibinger, began his working
life as an apprentice tool maker with the company. After moving to
the United States and earning a college degree, he returned to Germany
to work for TRUMPF, which didn’t spell its name all in caps back then,
in the decade following the second World War.
Wagman recounts how the senior Leibinger invented and patented the
machine tools that fueled the growth of TRUMPF. The company’s founder
asked him if he would take his pay in stock, which he did, eventually
owning all of the stock and running the company. He is now manager
of the worldwide operations of TRUMPF, which has evolved from a manufacturer
of sheet metal presses to the market leader in industrial lasers used
for cutting, welding, and stamping the materials used in turning out
everything from airplanes and automobiles to motorcycles and mascara
The acquisition of PLI’s manufacturing equipment, along with some
of its skilled employees and intellectual property, adds semiconductor
laser capability to TRUMPF’s dominance in solid state lasers.
Meanwhile, PLI, which will continue to operate as an independent entity,
developing and marketing telecommunication products, has also entered
into a technology transfer strategic alliance with newly-formed TRUMPF
As a privately-held, family-owned company, TRUMPF is under no obligation
to disclose financial details of its purchase, and Wagman declines
to do so. He does say, however, that the both Sarnoff and PLI are
pleased with the terms.
Wagman, too, is a happy man. Just before joining Sarnoff to write
a business plan for PLI and to get the fledgling on its feet, he had
been head of AMP’s optoelectronic business. When Tyco acquired AMP,
he left, a decision that has only come to look better and better.
A graduate of George Washington University (Class of 1964) with an
MBA from the University of Michigan, Wagman lives in Princeton with
his wife, Naomi Pliskow, a physician now working as a medical writer
for Excerpta Medica in Belle Mead. The couple has two daughters, a
D.C. attorney and a violinist about to start graduate studies at the
Wagman recently celebrated his 60th birthday with a family outing
to the eastern shore of Maryland that included a 10K race. He ran
with his daughters and his son-in-law, coming in third in his age
category. "I can run long," he says, "but I’m not fast."
So the win was exciting. As he waited — and waited — for his
name to appear on the winners’ board, the race organizers were looking
for one Lois Wagman to step forward to claim first prize in the women’s
over-60 age category.
"They had it wrong, it wasn’t `Lois,’ it was `Louis,’" Wagman
says with a laugh. The mix-up resolved, Wagman walked off a winner,
with a medal to prove it. In the TRUMPF/PLI deal "it was truly
a win-win-win case," he says. In his opinion both companies —
along with Sarnoff, PLI’s progenitor — racked up considerable
While there were three winners, for PLI the deal may have been a matter
of life and death. "Without this," says Wagman, "it would
have been very difficult for PLI financially. They would have struggled.
This will give them a new lease on life."
— Kathleen McGinn Spring
Cranbury 08512. Didier J. Le Lannic, president and CEO. 609-925-8100;
fax, 609-409-7022. Home page: www.princetonlightwave.com
College Savings Bank, pioneer of a savings program aimed
at arming youngsters with money for higher education, has been acquired
by Pacific Life Insurance Company of Newport Beach, California.
College Savings, with offices at 5 Vaughn Drive and a staff of 17,
was founded by Peter Roberts in 1987. It has assets of $260 million.
Its investment vehicle, CollegeSure CD, is marketed to parents and
grandparents worried about what inflation will do to college tuition
by the time their children are ready to enroll. The CDs index their
returns to college inflation rates.
As of press time, calls to College Savings about the company’s future
in this area had not been returned. A spokesman for Pacific Life said,
in a phone interview, that College Savings will retain its staff and
its presence in the Princeton area, and that Roberts will remain with
the company. Financial details were not disclosed.
Last month the bank reported Tier 1 regulatory capital of approximately
$18.4 million. The required capital-to-risk-weighted-asset ratio is
four percent, but CSB enjoys a ratio of 113 percent. The CDs are insured
by the Federal Deposit Insurance Corporation for up to $100,000 per
Roberts, 50, was known as a whiz-kid in the bond business when he
worked for Morgan Stanley and Lazard Freres in the early 1980s. Both
his parents were physicians on Long Island; he majored in economics
at Colgate and in finance at Stanford Business School.
His firm patented a computerized version of his college-inflation-indexing
concept. The primary investments of these CDs were high-grade adjustable-rate
The firm later sued the state of Florida for copying its idea in what
the New York Times called a rare instance of a patent dispute raising
constitutional issues. Florida’s response was that states are constitutionally
immune from intellectual-property laws under the doctrine of sovereign
immunity. In 1999, the Supreme Court agreed, and its decision outraged
the business community.
Business Week wrote that ". . . Justice John Paul Stevens likened
the court’s new ideology on state sovereignty to a `mindless dragon’
chewing holes in existing law. That dragon just took a big bite out
of the property rights of Corporate America."
Metro Center, Wing B, Suite 100, Princeton 08540-6313. Peter A. Roberts,
president. 609-987-3700; fax, 609-987-3760. Home page: www.collegesavings.com
Knowledge management is among the top five priorities
for most Fortune 1000 CEOs, says Kent Heyman, CEO of ServiceWare Technologies
on Emmons Drive. "If you took a poll, you would find they believe
harnessing, preserving, and leveraging their intellectual capital
is an enormous challenge," he says. His company offers a solution
— a way to efficiently access data so that intellectual capital
does not reside in separate silos.
ServiceWare, which trades on Nasdaq as SVCW, has 12 full-time employees
on Emmons Drive and 60 elsewhere, but it is planning to move the headquarters
from Princeton to somewhere in Edison. "We love the Princeton
area but Edison is closer for people flying in and out," says
ServiceWare has contracts with 30 software developers from Epam, also
based on Emmons Drive and expanding (see story below). "They will
raise their rates when I say this, but they have an awesome quality
— they are very, very good," Heyman says.
Andy Gilbert of Hale & Dorr on College Road East is ServiceWare’s
counsel, and Mark Rosenberg of Cushman Wakefield represents ServiceWare
in its move to Edison.
For both telephone and web-based help desks, ServiceWare’s product,
MindSynch, enables customers to access knowledge and information while
serving themselves via the web. With MindSynch, a call center representative
can more efficiently deliver information while talking to a customer
on the phone.
"Our product is vertical, not industry specific. Any business
with complex problem solving needs — telecommunications, pharmaceutical,
or financial services — can benefit from the leverage our product
can give them," says Heyman. Current clients include H&R Block,
Amgen, a utility company, a call center outsourcing company, and QUALCOMM.
In contrast to a search engine like Google, which merely grabs data,
MindSynch turns the data into useful information by doing an intelligent
search through patented technology to suggest relationships that it
has learned over time might be relevant. If a customer says his car
won’t start, the client might say that, "Your car is a VW, so
we know that the battery is often an issue."
"Our product is seeded with the basic knowledge people use every
day." For instance, if someone calls in with a computer problem,
representatives are able to access the database in a way that gives
the least experienced representative the same knowledge as the most
experienced. Heyman labels MindSynch as "self learning and intuitive"
as opposed to the older term, "artificially intelligent."
ServiceWare’s competitors include Seattle-based Primus Technologies.
Kana Communications, a Bay Area company that has an 11-person office
on Franklin Corner Road, E-Gain (another Bay area company) and Peregrine,
based in southern California.
Serviceware was founded by Jeff Pepper 11 years ago to supply content
to help desks and customer service centers. Pepper raised some private
money and merged his company with the Parsippany-based Molloy Group,
to form the current ServiceWare, which went public two years ago.
"It struggled," says Heyman. "ServiceWare lost $30 million
last year and consumed an enormous amount of cash, and in many ways
failed to meet investors’ expectations. This story has been repeated
over and over in the IT space, but we have been able to stay under
the radar screen, rebuild the product, and retool the sales force."
Pepper left the company and an investment banker, Thomas Unterberg
of CE Unterberg Tobin, took over as chairman of the board. Unterberg
found Heyman to be the CEO. "Unterberg saw the same opportunity
that I saw, a company with excellent customers and a very good product
that was suffering a little bit in the macro economic environment,"
says Heyman. "We have managed to improve the financial and operating
performance of the company in this difficult environment, which is
a real testimony to the people at ServiceWare."
Heyman grew up in Stockton, California, where his father worked for
the Santa Fe railroad. He went to California State at Fresno, Class
of 1977, and the University of the Pacific School of Law. He did business
litigation, most recently for Dowling Magarian Aaron and Heyman, and
he successfully created a precedent in a Federal Communications Commission
case, MGC vs. AT&T, which resulted in a start-up telecom collecting
$10 million from AT&T.
He left law, and with some friends started a telecommunications company
in Las Vegas. Four years later it had 2,500 employees and a revenue
run rate of $200 million. In 1999 to take advantage of the capital
markets, the firm, now known as Mpower, hired a new CEO who had been
president of Frontier Telecom, and he moved the headquarters to Rochester.
"I left in December, 2000, and took a year off to decide what
I wanted to do next and invest time in my young family." By that
time he had followed the company to upstate New York, where he and
his wife live with two sons and a daughter, ages eight, seven, and
"I could see the downturn in telecom and decided I wanted to get
involved in a different space. My software experience? None. It is
rare to have a new and refreshing challenge, and I have had the opportunity
to do it twice, so I consider myself blessed."
"In asking some of the fundamental questions that someone with
experience doesn’t ask — you learn about new and efficient ways
of driving the business. Whether telecommunications or software, it’s
all the same: have a quality product, treat customers well to develop
loyalty, deliver the product through good people, and make money for
— Barbara Fox
Princeton 08540. Kent Heyman, CEO. 609-514-1429. Www.serviceware.com
For ServiceWare (see story above) EPAM helped design
and develop a new release of its sales force automation software,
eService Suite, and changed it to a browser-based Java platform. EPAM
was credited with reducing development costs by 60 to 70 percent.
Founded in Belarus, Russia, this computer consulting firm bills itself
as the largest provider of technology outsourcing and E-commerce solutions
in the former Soviet Union region. Originally named Effective Programming
America, it expanded last year from 3,000 square feet to 8,000 feet
in the same complex, Princeton Commerce Center. Bill Barish of Commercial
Property Network represented both owner and tenant.
Half of EPAM’s 45 employees in this country are from Russia, and it
has more than 300 workers in Moscow and Minsk. It offers software
development, E-commerce and content services to more than 50 clients,
ranging from Bally USA, Colgate-Palmolive, and Intellicorp, to the
Belarus office of the World Bank. Its focus is sales force automation
on PCs for various industries, domestic and foreign. The programs
are webcentric and adaptable for either Internet and intranet use.
Among its programs is a report viewer, which can interface with SAP
Earlier this spring EPAM earned ISO 9001 certification and bought
a Russian company Exteria. For another client, West Group, a Thomson
company, EPAM launched a corporate website with the world’s largest
collection of online legal products (www.westgroup.com). In addition
to ServiceWare, EPAM has partnerships with Brio Software (business
intelligence solutions), Firepond (guided selling and online customer
assistance solutions), Interwoven (content infrastructure software),
SAP (collaborative E-business solutions), and SilverStream Software
Inc. (development of business applications).
The founder, Arkadiy Dobkin, studied electrical engineering at Minsk
Technical University and immigrated to the United States in 1991.
He worked for such firms as Prudential Insurance, Colgate Palmolive,
and SAP Labs. He has two daughters and a stepson. His wife, Elena
Annapolsky, has an internal medicine practice in Philadelphia.
The secret to offshore programming success, says Dobkin, is "just
hard work and good people, though getting temporary visas for a one-week
or two-week client meeting trip can cause problems." Still, he
says, "We have a good track record, and it’s getting better. Now
the embassies listen to us."
08540. 609-452-1701; fax, 609-452-1704. E-mail: email@example.com Home
08810. Bertold Fridlender, CEO. 609-655-0715; fax, 609-655-9291.
Phytogenics has moved from 2245 Route 130, where it was sharing with
Devaron to a laboratory in Dayton, but it also has lab workers at
Rutgers’ Cook College under Ilya Raskin. It does research plant sources
for new drugs and supplements, and also for synthesis of existing
drugs. In the past year it has signed agreements with Bristol-Myers
Squibb, DNAX Research (Schering-Plough’s California-based biotechnology
center), Degussa BioActives (part of the largest specialty chemical
company in the world), and Eisai Research Institute of Boston.
08691. Debbie Hart, president. 609-890-9207; fax, 609-581-8244.
The management services group moved from 2,000 square feet at 941
Whitehorse Avenue to 1 AAA Drive on July 31.
Suite 100, Princeton 08540. Edward J. Quilty, CEO. 609-514-4744; fax,
609-514-0502. Home page: www.dermasciences.com
Two companies founded by Edward J. Quilty — Derma Sciences Inc
and Palatin Technologies — made major moves last week. Derma Sciences
signed an agreement to purchase the assets and business operations
of Toronto-based Dumex Medical Inc. for $3.76 million. The sale is
expected to close this month. Derma will operate Dumex as a wholly
owned subsidiary and retain the founder as CEO.
The privately-held Dumex makes wound care products and other medical
devices, including dressings and sponges used in the operating room.
Founded 20 years ago, it has 100 employees and has 40 percent of the
wound-care product market share in Canada. Of its sales of $9.1 million
last year, three-fourths of the sales were in Canada. It has a 55,000
square foot factory and a 22,000 square foot warehouse in Canada,
plus a factory in Nantong, China and a distribution facility in Atlanta.
"The combined product lines will give us the opportunity to compete
with our major competitors for hospital group purchasing wound and
skin care contracts," says Quilty.
Drive, Cedar Brook Corporate Center, Cranbury 08512. Carl Spana, CEO.
609-520-1911; fax, 609-452-0880. Www.palatin.com
Quilty took a company that had been called Rhomed and re-listed it
as Palatin five years ago. With Carl Spana as the current CEO, the
company has 28,000 square feet on Cedar Brook Drive.
Last week private investors paid $4.2 million for 2.6 million shares
of Palatin Technologies. With every five shares came a five-year warrant
to purchase one share of stock at a 25 percent premium to the per-share
Palatin will use the money to develop LeuTech, an infection imaging
agent that is pending FDA approval, and also PT-141, which can treat
both male and female sexual dysfunction.
Among the investors were Perceptive Life Sciences Fund and Albert
Fried and Company of New York and funds in Luxembourg and the Netherlands.
at Princeton eCom and New Age Systems of Princeton.
and African-American studies at Princeton University. A memorial service
is Friday, September 27, at 2 p.m. in the Princeton University Chapel.
at Alta Services on Quakerbridge Road and had worked at Borders Bookstore
at Nassau Park.
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