In PerfectData, Pego Merger, Opposites Attract
On the surface, a company that markets cleaning products for computers, fax machines and other office equipment would have little in common with a firm that manufactures and distributes steam turbines, gas compressors and an array of environmental control machinery for industrial uses.
Yet, officials of Simi Valley-based PerfectData, representing the former, and those of Pego Systems of Long Beach, representing the latter, are betting that the two diverse operations can form a single, strong corporate entity.
PerfectData and Pego Systems, a wholly owned subsidiary of the Hartcourt Companies, have announced plans to merge their operations in the first of what would be a series of acquisitions aimed at creating a strong presence in the $22-billion pollution-control industry.
“PerfectData is a one-line company--we have a good brand name, we’ve been established, but we don’t have a broad array of different product lines we can offer,” said Chief Executive Joseph Mazin.
“The two companies are not naturally connected, but they both involve service and repairs,” Mazin said. “We have the Nasdaq public vehicle by which to grow. We are looking for business alliances, potential mergers, to make our company strong. We had been negotiating with several entities, and we were able to strike a deal that for the shareholders is quite compelling.”
A definitive merger agreement is expected to be signed within a couple of weeks, and the offer will be presented for shareholder approval. Officials of the Hartcourt Companies, which, if the merger occurs, will become the majority owner of PerfectData, have already talked with other companies about potential future acquisitions.
PerfectData provides products for telecommunications, computer systems, computer peripherals and general office cleaning. Pego markets industries affected by environmental law regulations, with a product line that includes air filtration systems and water purification systems. Clients include Coca-Cola and the Kimberly-Clark Corp. tissue products company.
“Pego is a company that has been around for 30 years . . . and they recently expanded from an 11,000-square-foot to a 22,000-square-foot facility they own in Long Beach,” Mazin said. “They give us a more solid foundation, a company that is profitable, doing more revenue than PerfectData.”
PerfectData reported a net loss of $101,000 for the second quarter ended Sept. 30, compared with a loss of $157,000 for the same period in 1997.
