Basic Four Inc. Merges With MAI Holdings Inc.
MAI Basic Four Inc., a Tustin computer maker, has merged with MAI Holdings Inc., the shell company created by MAI’s main stockholder, Bennett LeBow, when he purchased Basic Four in January, 1985.
Fred Anderson, Basic Four’s vice president and chief financial officer, said that there were “no consequences” from the merger except some savings on the administrative costs of maintaining two sets of financial statements. Anderson linked the resignation of two Basic Four board members--both officers of LeBow Industries Inc.--to the merger, describing it as a “vote of confidence” in the success of Basic Four’s management in bringing the company back from losses of $10 million on sales of $260 million in 1984, prior to LeBow’s purchase of the company, to net earnings of $5.5 million on $168 million in sales in the first eight months of 1985.
“Because of the improved performance of the operating company,” Anderson said, “the conclusion was that the West Coast management under (Basic Four President and Chief Executive William B.) Patton could run the company and therefore Mr. Patton was appointed as the chairman of the executive committee of the board of directors.”
LeBow purchased MAI Basic Four for $105 million from New York-based Management Assistance Inc. To finance the deal, LeBow established MAI Holding which, in turn, issued $60 million in subordinated debentures and $15 million in preferred stock and paid $30 million in cash to Management Assistance.