PC-maker Nexar hires firm to review
possible sale
By Jerry Ackerman, Globe Staff, 03/20/98
assachusetts' last remaining computer manufacturing company, Nexar
Technologies Inc. of Southborough, said yesterday it has retained an
investment banking company to review ''various inquiries'' about possible
joint ventures or acquisitions.
Albert J. Agbay, Nexar's chairman and chief executive, said ''at least half a
dozen'' companies, including IBM Corp., have made such inquiries since
summer.
The banking house Nexar has hired, Southport Associates of Southport,
Conn., said the review process and any subsequent negotiations are likely to
last several months.
''We felt the interest level was at such a high point that we would be in better
hands with professionals,'' Agbay said.
Dale McIvoy of Southport said Nexar's strength is a patented design for
personal computers that allows users without any special skills to upgrade
parts, including the main circuit board, which contains the processor, in one
or two minutes.
The design was developed, Agbay said, to let buyers combat an
obsolescence cycle in the computer industry that has shrunk from three years
in the 1980s to less than 18 months today.
Nexar shares rose 1/4 in Nasdaq trading after yesterday's announcement,
closing at 3 1/2. At one point midday, they were up 3/4. Founded in 1995,
Nexar went public last April at 9, peaked at 9 5/8 in May, and hit a low of 2
15/32 in December.
Nexar has 35 employees at its offices in Southborough and about 40 at its
assembly plant in Hayward, Calif. Most parts for its computers are imported
from Asia.
Selling 37,000 of its PCs last year, the company reported a $13.3 million
loss, or $1.32 per share, on $33.6 million in revenues. In 1996 Nexar lost
$7.5 million, or 98 cents a share, on $18.7 million in revenues. Agbay
predicted nearly 60,000 units would be sold this year.
Nexar has always anticipated a merger or a sale would be needed to
provide backing for growth, Agbay said, but favorable trade press reviews
prompted inquiries beginning last summer.
IBM was first to call, he said. ''When they called they actually came to the
point [in discussions] where they said we should be bought,'' Agbay said. ''I
told them that they had paid $3 billion to buy Lotus,'' referring to
Cambridge-based Lotus Development Corp. ''I told them that I thought we
had more long-term upside than Lotus.'' He said discussions have continued
but with no definitive direction. |
