Sale by Computer Automation of Test Unit Falls Through

Computer Automation Inc. said Wednesday that the proposed $4-million sale of its automatic test equipment business to Technology Marketing Inc. of Irvine has fallen through.

Computer Automation, a troubled vendor of mid-size computers and other electronic gear, announced on Sept. 21 that it would sell the test equipment unit--which accounted for about 60% of the firm’s $17.2-million revenue for the fiscal year ended June 30--to Technology Marketing.

But the two firms were unable to come to a final agreement on terms and conditions of the transaction. Christopher Miner, chief financial officer of Technology Marketing, said “we didn’t like what we saw” in proceedings that followed a September letter of intent.

The assets of the test equipment operation and the underlying business were not as strong as Technology Marketing had originally believed, Miner said. The company was interested in the Computer Automation unit because it complemented Technology Marketing’s existing line of computer memory board test equipment, Miner added.

William Osmundsen, chief financial officer of Computer Automation, said the company would seek another buyer for the division but that no discussions are now under way. The Irvine company reported a loss of $1.9 million for the nine months ended March 31, but still has not released earnings for the year ended in June 30.