Alpha Microsystems of Santa Ana Scraps Merger
Alpha Microsystems, a financially troubled manufacturer of business computers, said Thursday that the proposed merger with New York-based Aril Group Inc. has been terminated because Aril could not arrange financing.
When the tentative deal was announced Nov. 19, Alpha Micro officials said it depended upon Aril’s ability to finance the $11-million cash deal and other conditions, including approval of shareholders.
David A. Young, chief financial officer for Alpha Micro, said the company will continue to seek a partner through its investment banker, Los Angeles-based Houlihan Lokey Howard & Zukin. He said Aril could still be considered as a partner.
And a statement from Alfred Shoenberg, president of Aril, indicated that his firm remains interested in acquiring Alpha Micro. He could not be reached for comment.
Young said the failed merger does not spell immediate cash trouble for Alpha Micro, which has had losses because of a slump in the minicomputer business and recently lost two top executives: “I’m sure it (the failure) has a disruptive effect on the company, but we continue to move forward. We didn’t make the original approach here, and we have adequate cash.”
Clarke Reynolds, president of Alpha Micro, said the company must now get back to emphasizing its operations.
“It is time to focus our full attention on Alpha Micro’s business and serving our dealers and end users,” he said.
In October, Aril made an unsolicited cash-and-stock bid for Alpha Micro. Alpha Micro rejected the offer as inadequate. In November, Aril upped the ente to $3.75 in cash for each share of Alpha Micro stock.
Aril, which has operations for telecommunications and manufacturing kitchen cabinets, sought to acquire Alpha Micro as a springboard into the computer industry. Formerly known as Marcom Telecommunications, Aril was formed last January when Corporate Data Sciences Inc. spun off its telecommunications operations. CDS, a paper manufacturing and packaging company, retains a major interest in Aril.
