Alpha Micro Finds a Buyer in New York Firm : Deal: The business computer manufacturer has tentatively agreed to be bought by the Aril Group for about $11 million.
Alpha Microsystems, a struggling manufacturer of business computers, has tentatively agreed to be acquired by New York-based Aril Group for about $11 million.
Aril, a holding company that recently acquired a kitchen cabinet manufacturer, has agreed to pay $3.75 in cash for each of Alpha Microsystems’ shares outstanding at the time the deal is completed. The sale is scheduled to close before April, 1991.
Under the agreement, however, Alpha Micro is allowed the option of negotiating a more attractive deal with another buyer, said David Young, chief financial officer. The Santa Ana company has hired a Los Angeles investment bank, Houlihan Lokey Howard & Zukin, to look for other buyers.
The latest offer compares to an initial offer in October from Aril Group of $3.25 a share in cash plus an exchange of 3.75 shares of Aril stock for each share of Alpha Micro’s stock.
The latest offer of $3.75 represents a 76% premium over Alpha Micro’s closing stock price Monday of $2.125 per share. Alpha Micro said it expressed concerns about the adequacy of the first offer and about Aril’s ability to finance the acquisition.
Young said Alpha Micro considered Aril’s latest offer more favorable than the initial bid because shareholders will be fully paid in cash.
The deal is subject to, among other conditions, the Aril Group’s arranging the necessary financing and the approval by shareholders and directors of both companies.
The deal comes on the heels of John S. Cain’s resignation Friday as president of Alpha Micro. The company said Friday that Cain’s departure was due to personal reasons and was unrelated to the merger agreement.
Alfred Schoenberg, Aril Group’s president, said he was “pleased with the agreement in principle and looking forward to long-term success for the future of the Alpha Micro family, including its employees, dealers and customers.”
Schoenberg said earlier that the company plans to expand into the computer industry. Aril Group, formerly Marcom Telecommunications, divested its telecommunications operations last year and was formed in January as a spinoff from Corporate Data Sciences Inc., a paper manufacturing and packaging company that retains a majority stake in Aril.
Aril has assured Alpha Micro that it will obtain financing for the sale and has retained Ventana Group in Irvine as its financial adviser, Young said.
Alpha Micro reported a second-quarter loss of $1.1 million on sales of $13.5 million, contrasted with earnings of $113,000 on sales of $13.1 million last year.
