Dataproducts signs deal to sell to Hitachi Group.

Dataproducts signs deal to sell to Hitachi Group 

Officials declare `no changes in our business strategy'

Officials at Woodland Hills-based Dataproducts Corp., which recently has been plagued by financial trouble and an unsuccessful takeover attempt, have signed an agreement to sell the computer printer manufacturer to two members of the Hitachi Group of Japan.

The Hitachi affiliates, Hitachi Koki Co. Ltd. and Nissei Sangyo Co. Ltd., are "interested in keeping all our management team," said Jack C. Davis, Dataproducts chairman and chief executive officer. "There will be no changes in our business strategy. The company will retain the Dataproducts name."

In the agreement company officials accepted a $10-a-share tender offer worth about $160 million -- or $64 million more than the company's market value before last Monday's announcement.

The price of Dataproducts stock rose to $9.75 a share by the close of trading last Tuesday on the strength of investor confidence that the sale will be completed.

The deal could be concluded as early as next week, said analyst William Easterbrook. It has been approved by the Dataproducts board and does not require shareholder approval, he noted.

"The worst thing that could happen is the [U.S.] Justice Department may want a spin-off" of a Dataproducts military printer operation in Connecticut, said Easterbrook. "That's the only stickiness."

Dataproducts should have year-end revenues of $309 million, Easterbrook predicted although, he added, it is expected to show a small loss for the year. The company should break even in the fourth quarter, he said.

Dataproducts has had a bumpy financial ride in the last five years. The company's problems began about the same time as the computer industry nationwide went into a downturn.

In 1986 the company got a new chairman and chief executive officer in Davis. And in 1988 its takeover woes began.

That year DPC Acquisition Corp., which held 8 percent of Dataproducts stock, filed documents with the Securities and Exchange Commission indicating it would attempt a takeover.

In September 1989 Davis announced a restructuring plan that included the sale and leaseback of the company's Warner Center headquarters and a cash tender offer to shareholders.

The hostile takeover attempt ended in January when DPC confirmed it was unable to obtain the financing required to purchase the stock it needed.

Dataproducts will benefit from Hitachi laser equipment, said Davis. American companies are reliant on Japanese parts in producing laser printers, a growth area in the generally sluggish computer printers market.

"It's a good deal for both," said Easterbrook. "Hitachi will gain the distribution channels Dataproducts has worked up."

Hitachi will overcome a threat by Dataproducts to the low-end of the laser printer market by acquiring the company with Dataproducts' "crown jewel" solid-ink jet printer, Easterbrook said. The two have also been competitors in line printers, although their sales are "on the decline," he added.