Computer Memories Seeks Merger Deal

Computer Memories, a thriving computer disk drive maker until IBM stopped buying its products last year, said Tuesday that it is no longer making disk drives and wants either to be acquired or to make an acquisition.

The announcement came as Computer Memories reported an $18.1-million loss in the year ended March 31, primarily because of $25.4 million in accounting adjustments, mostly writedowns of inventory, excess property and equipment. The Chatsworth company’s year-end loss contrasted with a $3.8-million loss in the previous fiscal year and came on a 7% increase in revenue to $116.2 million.

The company said it has retained Alex. Brown & Sons, a Baltimore investment banking firm, to assist it in finding a buyer or an acquisition.

Chairman Irwin Rubin said in a statement that the company might look for an acquisition outside of the electronics industry.

‘Finally Pulling the Plug’

But Rubin said that there is no assurance that Computer Memories will be successful in its searches.

“It looks like Irwin is finally pulling the plug,” said James Porter, editor of Disk/Trend Reports, an authoritative publication on disk drives.

Documents filed Monday by the company with the Securities and Exchange Commission said Computer Memories is interested in being bought in exchange for shares in a publicly held company.

Computer Memories, which is now limiting its business to repairing disk drives and selling its surplus inventory, has been struggling since IBM announced last August that it would no longer buy the company’s disk drives--devices used to store and retrieve data in personal computer systems--for its powerful PC AT personal computers, effective Dec. 31.

In the latest fiscal year, IBM’s orders accounted for more than 79% of Computer Memories’ revenue, the SEC documents said.