General Automation Pondering New WesPac Proposals
General Automation, a struggling Anaheim computer maker, said that it has been unable to reach an agreement with Irvine-based WesPac Technologies about a possible business combination but that talks between the two firms are continuing.
As previously reported, Anaheim-based General Automation and WesPac have been discussing a possible merger or other form of partnership since October. The talks began shortly after General Automation reported an $11-million loss for its fiscal 1988 year ended June 30. The firm lost $879,000 in the first quarter of its current year.
Although the talks with WesPac have failed to produce an agreement, General Automation has received additional proposals from WesPac during the past week and is considering those plans, General Automation Chairman Alexander W. Giles Jr. said Thursday.
“We’ve pursued two avenues with WesPac,” Giles said. “One is a combination of our European operations with theirs, and the other is a combination of the two companies in the United States.”
WesPac is a supplier of computers for the transportation and airline industries. General Automation manufactures business computers for hotels, hospitals, law offices and factories.
General Automation said it also has received proposals from two investor groups--one European and one American--who are interested in investing in the firm. Both proposals would involve the investors becoming a major shareholder of the company, Giles said.
“If terms satisfactory to the company and the potential investors can be worked out, either or both of these proposals would fund General Automation’s need for additional working capital,” Giles said.
General Automation has a “very strong” backlog of orders for the current quarter but lacks sufficient cash to “build all the products our customers want us to build,” Giles said.
General Automation also said its directors have rejected an offer from a United Kingdom-based company to purchase its U.K. operations.
Giles said the company hopes to reach a definite agreement with one of the interested parties within the next several weeks.
