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Parallel Computer Acquired 16 Months Ago : General Automation to Sell Money-Losing Subsidiary

Times Staff Writer

Sixteen months after acquiring a small Santa Cruz computer maker, General Automation of Anaheim said it has decided to sell the money-losing operation to a British firm for an undisclosed amount of cash, notes and securities.

Integrated Micro Products, a Consett, England, computer company, has agreed to purchase Parallel Computer, a wholly owned subsidiary of General Automation.

General Automation purchased the Santa Cruz firm in April, 1987, as part of an effort to diversify into other segments of the computer industry. But the Anaheim firm has acknowledged that Parallel’s sales have been disappointing, and the unit has been losing money. Parallel lost $350,000 in the quarter ended last January, the last period for which General Automation disclosed the unit’s performance.

Parallel’s losses have been a sizable drain on General Automation’s financial performance during the past year. For the nine months ended March 31, General Automation lost $2.2 million on revenue of $37 million, compared to earnings of $361,000 on revenue of $29.7 million a year earlier.

“They’ve been losing money ever since the (Parallel) acquisition,” said Russell R. Diehl, a Newport Beach investment banker. “The Parallel business hasn’t been as compatible with (General Automation’s) other business as they originally thought.”

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Parallel Computer manufactures so-called fault-tolerant computers that are designed to protect crucial computer data in the event of a power failure or natural disaster. General Automation makes microcomputers for specialized markets such as financial services, health care, hotel management and government agencies.

A General Automation spokesman said the company expects the deal with the British firm to be completed within 30 days.


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