Accord With Unnamed Buyer : Resdel Will Sell Off 90% of Its Operations
Resdel Industries, a financially ailing Newport Beach defense contractor, said Thursday that it has agreed to sell about 90% of the company’s operations to an unnamed “major multinational corporation.”
Resdel, which lost a staggering $6.4 million on sales of just $7 million in the 6 months ended Dec. 31, said the sale involves most of its Resdel Engineering subsidiary in Arcadia in Los Angeles County. The company did not disclose a purchase price.
Resdel said it had signed a memorandum of understanding for sale of the defense-related business of Resdel Engineering. The sale is subject to approval by the Defense Department and a final agreement on the sales price, among other conditions.
The Arcadia division has several defense-related contracts for work on microwave and digital equipment and for electronic warfare and anti-submarine systems. A small part of the division’s business is not included in the sale.
The operations being sold represent most of Resdel Industries’ revenue, “but also a majority of the losses of the corporation,” Chief Executive Officer Jack B. Spencer said.
“We believe this sale will have a long-term favorable impact for Resdel shareholders,” Spencer added.
Resdel Chairman Charles W. Missler said the sale “is a key part of our strategic plan to redeploy Resdel’s assets into commercial growth areas, including expansion of our telecommunications products.”
Missler said the sale of Resdel Engineering to a large corporation should help its business and benefit customers and employees.
Resdel said that the buyer requested that its name not be disclosed and that the company will be identified once the sale is completed.
After the sale, Resdel’s largest remaining operation will be its SanBar telecommunications subsidiary in Irvine.
The sale of Resdel Engineering has been in the works since July, 1988, when the company said it had received several offers for the business and hired the investment bank of Drexel Burnham Lambert Inc. to study the proposals.
In September, 1988, Resdel agreed to sell up to 45% of its SanBar telecommunications subsidiary to a Colorado investment company headed by Missler.
And in October, Resdel announced an $8.3-million loss and laid off 100 employees, which was a quarter of its work force at the time.
In March, Resdel sold another money-losing subsidiary in Texas, Resdel Manufacturing, to a group of private investors.