Nexar targets licensing, deals
Friday, March 20, 1998
By Todd Wallack
An upstart PC maker in Southboro has decided to team up with the big boys.
Nexar Technologies Inc. yesterday said it has hired a financial adviser to
explore the possibility of licensing its technology, launching a joint venture or
selling itself outright to a larger player, like Compaq Computer Corp. or Dell
Computer Corp.
What makes Nexar different is that it has developed a modular PC design that
is easy to upgrade. But the year-old company, spun off from Palomar
Medical Technologies Inc. last April, has only a tiny market presence relative
to the PC giants.
Nexar recorded sales of just $34 million last year and has never posted a
profit. Its stock has also fallen from its initial offering price of $9 to $3.50
yesterday, up 25 cents.
''They are trying to figure out how to participate in this multibillion dollar
industry,'' said Dale McIvor, a partner with the Connecticut-based adviser,
Southport Partners.
''They have proven their concept . . . (but) clearly scale and size has a lot to
do with success.''
Nexar has already received a few inquiries from other PC makers, McIvor
said, but he said his firm will seek out more. Company officials could not be
reached for comment.
Jeff Evans, an analyst with Credit Lyonnais Securities in New York, said he
thinks the technology has enormous potential but needs wider distribution.
''This is a big market and you need a big drum to beat,'' said Evans. ''This
type of thing was not unexpected.''
But even without a deal, Evans said he thought the company could become
profitable later this year and survive on its own - selling PCs to large
businesses.
''It has a sustainable business model,'' he said. |
