2 Japanese Firms to Buy Dataproducts for $160 Million
Two members of Japan’s Hitachi Group said Monday they agreed to buy Dataproducts Corp. for about $160 million in cash, about three months after a New York investor group abandoned a bid for the Woodland Hills computer-printer maker because it could not raise the money.
The two companies, Hitachi Koki and Nissei Sangyo, will form a joint venture corporation that plans to acquire Dataproducts through a $10-a-share tender offer. Hitachi Koki--which is 24% owned by Hitachi Ltd., the large Japanese electronics company--makes power tools and scientific instruments, as well as computer printers. Nissei Sangyo, a trading company owned 57% by Hitachi, is the Hitachi Group’s primary marketing arm.
Dataproducts stock closed Monday at $9.625 per share--up $3.25--in trading on the American Exchange.
The proposed merger, approved by Dataproducts’ directors, should give the company some long-sought stability, said Dataproducts Chairman Jack C. Davis, who will stay on as chief executive of the new company.
“Now we’re able to focus on the business, and not have to worry about some other outside disruption,” Davis said.
Under pressure from the earlier takeover bid by DPC Acquisition Corp., Dataproducts last year embarked on a restructuring that led to the layoff of nearly 11% of its workers and the sale of its headquarters property to raise cash for a $40-million stock buyback.
Davis said the Japanese companies and Dataproducts had discussed selling Dataproducts’ New England subsidiary, which makes printers for the military. Dataproducts had planned to sell the unit last year in the restructuring, but abandoned the attempt because of the slowdown in defense spending.
Davis said that, otherwise, “our first premise is to continue operating the way we are.”
In January, DPC announced that it could not raise enough money to finance its proposed $190-million, $10-per-share takeover of Dataproducts, blaming “current disarray in the financial markets.” The DPC deal was to be partly financed by junk bonds, as well as bank loans and cash.
The per-share prices for the Hitachi Koki/Nissei Sangyo and DPC bids for Dataproducts are not directly comparable because the company bought back about 20% of its stock after the DPC bid collapsed.
When DPC dropped its bid, Davis complained that the tender offer and a separate attempt by DPC to oust Dataproducts’ management had been “disruptive to people’s lives and jobs. We’ve lost a lot of momentum and drive.”
Responding to the DPC offer, Dataproducts had decided to transfer some of its production lines in Woodland Hills to plants in Ireland and Hong Kong, which will lead to the layoff of about 400 workers by the end of April.
In addition, Dataproducts sold its 22-acre headquarters property near Warner Center to Trizec Warner for $59.5 million. The $40 million in net proceeds from the sale were used for the stock buyback.
Dataproducts also put itself up for sale and attracted inquiries from about 70 parties, a process that led to the Hitachi Koki/Nissei Sangyo bid, Davis said.
