Western Digital Corp. plans to pay about $4.5 million to acquire a Pomona company in a move designed to strengthen Western's computer products line, company officials said Wednesday.
The Irvine-based company hopes to iron out the details of the proposed acquisition of Adaptive Data Systems Inc. by the end of the month, according to Kathy Braun, a Western Digital vice president. An agreement in principle to merge the companies already has been signed by Western Digital and the privately held ADSI.
The purchase price, which is not yet definite, "should be roughly the size of (ADSI's) annual sales" of $4.5 million last year, Braun said. "It's a small (acquisition), but it is a good fit." ADSI makes high-end disk and tape controllers for computers. Western Digital produces a more diversified line of data-storage-related products.
Western Digital had planned to develop internally the line that ADSI now sells, and Braun said the acquisition would save Western both time and development funds. "You can say that the deal pays for itself," she said.
Braun said she hopes to move ADSI's manufacturing operations into Western Digital plants but to maintain sales offices for both, at least in the early period of the merger. She said that would mean "significantly improved cost structure" for ADSI products, which now are manufactured by subcontractors. Western Digital probably will keep all or most of ADSI's 44 employees, who include engineering development, testing and corporate personnel.