Delphi Systems Acquires Rival McCracken in Cash, Stock Deal

Delphi Information Systems Inc., a Westlake Village provider of computer systems to the insurance brokerage industry, said it acquired rival McCracken Computer Inc. for about $10.2 million in cash and stock.

McCracken was a privately held concern based in Burlington, Mass., formerly headed by Frank McCracken. In the acquisition, Delphi paid him and McCracken’s other shareholders $3.2 million in cash and 1.03 million shares of Delphi common stock that, based on Monday’s closing price of $6.75 a share, is valued at $6.95 million.

The McCracken shareholders also signed various agreements not to compete with Delphi. The agreements would provide the shareholders with up to an additional $4.7 million in cash over the next six years.

The companies, which tailor computer and automation systems for sale to independent property-casualty insurance agents, are about equal in size. McCracken’s total revenue in calendar year 1990 was $22.7 million, and Delphi’s revenue for the nine months that ended Dec. 31 was $17.7 million. (Delphi’s fiscal year ends March 31.)

The merged company “will provide our customers with more exciting products and services than either organization could have developed independently,” Delphi President Richard Janssen said in a statement.

Frank McCracken will not have an operating role at Delphi, but the merger has made him a major stockholder of Delphi with about 400,000, or 7.3%, of the company’s shares.

Separately, Delphi reported a $145,000 profit for its fiscal third quarter that ended Dec. 31, compared with a loss of $18,000 a year earlier that included a $1.71-million charge stemming from an accounting change.

The latest profit came on a 25% increase in Delphi’s revenue, to $6 million from $4.8 million.

For the first nine months of its fiscal year, Delphi earned $1.3 million, compared with a loss of $1.9 million on revenue of $15.3 million a year earlier.