Revenue Boost Expected From Deal With Control Data : Shugart Acquires Disk Drive Production Line

Shugart Corp., a Laguna Hills maker of flexible disk drives for computers, said Monday that it has acquired the manufacturing assets and servicing rights of Control Data Corp.’s flexible disk drive production line.

The recently restructured Shugart, which refused to disclose the purchase price, said the acquisition of the Minneapolis company’s line does not include the rigid-disk operations of Magnetic Peripherals Inc., a joint venture managed by Control Data.

The addition will help Shugart earn more than $50 million in revenues by the end of its fiscal year next Feb. 28, said Elaine Greco, a spokeswoman for Shugart.

Control Data’s CDC/MPI disk drive manufacturing line in Oklahoma City will be transferred to Nogales, Mexico, where Shugart is centralizing its production of eight-inch and 5-inch flexible disk drives under its own label. Greco said the company also may transfer its Hong Kong production line to Nogales.

Shugart was a San Jose area division of Xerox Corp. when it was purchased March 1 by the Narlinger Group, a Southern California investment group, and moved to Laguna Hills, Greco said. The Narlinger Group also had acquired the flexible disk divisions of Memorex Corp. and Siemens A.G. of Munich, Germany, in the last 18 months, she said.

The group was operating under the name of World Disk Drives but folded its operations under the better-known Shugart name. Dennis Narlinger, president of Shugart, also heads the investment group.

“We see a need for a full-line flexible disk drive manufacturer that can give technical service and offer spare parts,” Greco said. The purchase of the Control Data line gives Shugart that full-line capacity, she said.

Shugart also maintains service centers in Laguna Hills, San Jose, Munich and Hudson, Mass.

Though Shugart is an original-equipment manufacturer, Greco would not divulge what computer companies or brands use the Shugart disk drives. Disk drives are the devices in computers that record and store the information put into the computer.

Control Data decided last year to discontinue its flexible disk drive production and focus on high-performance, high-capacity data storage equipment, Lawrence Perlman, president of Data Storage Products Group, a Control Data division, said in a prepared statement.