Applied Circuit Moves to Buy Anaheim Firm
Continuing its acquisition binge, Applied Circuit Technology Inc. on Wednesday signed an agreement in principle to buy SRL Inc. of Anaheim for an undisclosed amount of cash and stock.
Walter R. Menetry, Applied president, said the acquisition will give his electronics firm an entry into the semiconductor test market. SRL, a 9-year-old, privately held firm, provides reliability testing services for semiconductors, integrated circuits and other microelectronic devices used by defense, aerospace and commercial industries. Applied is a leading supplier of test equipment and services for rotating magnetic memory devices used in computers.
The agreement calls for the acquisition to be completed by Aug. 1. If consummated, it would be the third purchase Applied has made since November as it seeks to diversify beyond its original business of supplying automatic systems that test Winchester rigid disk drives used in computers.
Applied acquired San Jose-based Certel Inc. six months ago, expanding its line of testing systems and its customer base into the floppy disk market. The Anaheim company last December also acquired Irvine-based Dumont Magnetic Technology Inc., a firm which repairs floppy and hard-disk drives.
SRL President Dennis Segreto also declined to disclose the terms of the agreement but added that his company will make a profit if the deal goes through. Segreto said SRL was approached by Applied about six months ago about the deal.
“It will accord Applied diversity and entry into a new market and it will also help us in our growth plans,” Segreto said. He added that SRL projects about $30 million in sales over the next five years. As with Applied’s other acquisitions, SRL would become a wholly owned subsidiary of ACT. Applied reported a loss of $498,973 for the first fiscal quarter ending Jan. 31, 1985, compared with net income of $619,891 for the same period a year earlier. Revenues fell 47% to $2.6 million compared with $4.9 million for the same period last year.
Menetry said he expects the acquisition to boost Applied’s sagging revenues and earnings in coming months. He said that SRL is an ongoing, profitable company with an established position in the market.
