NEC’s Deltak Unit to Merge With Advanced Systems
National Education Corp. said Friday that it plans to merge its Deltak subsidiary with Advanced Systems Inc., both based in the Chicago area, to create a $180-million-a-year vocational training unit.
Under the proposed all-stock merger, each of Advanced Systems’ 5.6 million shares of common stock will be converted into 1.625 shares of National Education common stock.
Newport Beach-based National Education closed Friday on the New York Stock Exchange at $23.75 per common share, down $1.875, giving an indicated value to the merger of $217.7 million. Advanced Systems closed Friday on the NYSE at $34.875, up $8.875 on news of the merger.
The companies said the transaction would be considered a pooling of interests and thus would be tax-free for shareholders.
Advanced, headquartered in the Chicago suburb of Arlington Heights, offers consulting services and training products, with an emphasis on information processing. It employs about 400 people and last year earned $7.4 million on sales of $63 million.
Deltak, acquired last year from Gulf+Western Industries, provides training in data processing and management.
The new combined company will probably be based in Naperville, where Deltak is headquartered, said H. David Bright, president and chief executive officer of NEC.
The transaction would strengthen the international influence of Deltak, Bright said, especially in Europe.
William R. Roach, president of Advanced, and Ronald Tapper, president of Deltak, both will become senior vice presidents of NEC if the merger is completed. Roach also would be named president and chief executive officer of the new subsidiary, while Tapper would assume responsibility for corporate strategic planning.
In addition, Roach and Advanced System directors William D. Walsh and Richard C. Blum will join NEC’s board of directors.
The merger is expected to be completed by December if stockholders of both companies approve.
NEC reported earnings of $15 million on revenues of $247 million in 1986.
The training company, with worldwide operations, employs more than 4,000 people. The company has, in the past two years, made a number of acquisitions, including Deltak and a second Gulf+Western unit, Resource Systems International; a chain of training schools from Coastal Business Colleges, and Motivational Systems in New Jersey.
