Denver Firm to Pay More Than $50 Million : Energy Company to Buy GA Technologies
Ending months of speculation and nearly a year of negotiations, Chevron Corp. on Wednesday said it has agreed to sell its GA Technologies subsidiary to a group led by a Denver-based energy and land company for more than $50 million.
No management changes are planned at the high technology company, based here, officials said, although a “board of overseers” will advise management on nuclear and defense-related issues.
The purchasing group recently named itself General Atomic Technologies Inc., and is led Cordillera Corp. of Denver, which is owned by brothers Neal and Linden Blue. The Blue brothers have gas utility companies in Ohio, Utah, Colorado and Wyoming; oil and gas interests in Canada, and real estate operations in Colorado.
The sale could be completed within two months, but it still must be approved by several federal agencies, primarily the Nuclear Regulatory Commission. Because GA Technologies has a nuclear materials license, federal regulators must approve any change of ownership.
Entrepreneurial-minded owners will allow GA Technologies to generate “rapid implementation and commercialization” of existing operations, according to President Kerry Dance. Government contracts accounted for most of the firm’s $154.5 million in revenues last year.
The company and its 1,250-member work force will remain on its current 120-acre site in the Torrey Pines Mesa area of La Jolla. Chevron Land and Development Co. will retain ownership of the 240 acres surrounding the site and might develop the land in the future, officials said.
GA Technologies’ board of overseers includes former U.S. Secretary of State Alexander Haig, TRW co-founder Simon Ramo, Southern California Edison Chairman William Gould, former GA Technologies President Harold Agnew and retired Joint Chiefs of Staff Chairman John Vessey. The group is advisory and does not have the fiduciary responsibility of a corporate board of directors.
GA Technologies’ current board of directors consists of Dance, Agnew and three members of Chevron, who will resign when the sale is completed.
The company will expand its national defense activities--especially in electronics, advanced materials, chemical agent destruction systems, space power and electronic launchers, Dance said. GA Technologies also will expand its commercial markets, with concentration on advanced methods to incinerate toxic wastes.
San Francisco-based Chevron bought GA Technologies two years ago when it purchased Gulf Oil, but it has been trying to sell the firm ever since. Last fall Chevron turned down a leveraged buy-out offer by a group of GA Technologies executives.
The Blue brothers opened negotiations with Chevron in September, and speculation that a deal was nearing completion first surfaced last fall. Both Chevron and GA Technologies officials refused to comment on the sale talks until early March, when Dance, in a surprise move, confirmed a pending ownership change during ceremony unveiling a new fusion reactor.
At the time, Chevron management said that a contract to sell the subsidiary would be signed by the end of March.
Negotiations dragged on because it was “difficult for Chevron to evaluate the company, the property and the technology,” said a source familiar with the sale. “And they worked hard to get the best deal they could.”
GA Technologies was founded in 1955 by General Dynamics and was then called General Atomic. It was sold to Gulf Oil in 1968 and renamed Gulf Atomic. Royal Dutch Shell later became a partner, but sold its interest back to Gulf in 1982.
Chevron took over when it bought out Gulf in 1984. Since then, Chevron has tried to reduce its debt and divest assets that are not part of its core business.
