No ‘Shake-Up’ Plans for Irvine Computer Firm
The private investor who intends to become the single largest shareholder in Computer Automation later this month plans no major shake-up at the financially troubled Irvine computer maker, a representative said Tuesday.
“It doesn’t bother us that the company has lost $12 million in the last three years because we understand how that happened and how the company intends on getting out of that situation,” said David Smoak, financial adviser to Larry Doskocil, who purchased an option to buy 23.5% of Computer Automation’s shares. “We don’t look for any fights or shaking up.”
Last week, Doskocil, who is based in Hutchinson, Kan., and is the founder of a Kansas-based pizza-topping company, revealed in a filing with the Securities and Exchange Commission that he purchased an option to buy 484,700 shares of common stock in Computer Automation. The option, acquired from American Financial Corp. in Cincinnati, allows Doskocil to buy the shares for $7 each, or a total of $3.4 million. Doskocil, whose company sells about $100 million worth of precooked sausage, pepperoni and hamburger to pizza parlor chains each year, paid $121,175 for the option, which expires Sept. 30.
Stake in High-Tech Company
Doskocil also revealed that he plans to buy an unspecified amount of convertible subordinated debentures from the company, a move that is expected to give him the right to name two representatives to Computer Automation’s board of directors. Smoak said that he would be one of Doskocil nominees to the board and that the company would use proceeds from the debenture sale to bolster its depleted cash reserves.
Smoak said that Doskocil, who is investing in Computer Automation as an individual and not through the company he controls, has been interested in acquiring a stake in a high-technology company for several years and had evaluated several opportunities in the past. “This one looked pretty good to us,” he said.
Smoak said that the Computer Automation deal was initiated by the company, perhaps in response to suggestions from PaineWebber Inc. advisers who were retained in June to help the company explore its remaining business opportunities.
Ira Robinson, an attorney for Computer Automation, declined to comment on Doskocil’s dealings with the company, saying only that an official announcement would be made later this week.
The deal is the latest in a series of moves at the once high-flying computer company. Early last month the company, which has suffered 10 consecutive quarterly losses, announced tentative plans to sell its commercial systems division to W. Norris Agee, an Orange County businessman who also owns Trendata Corp. in Costa Mesa.