Singapore firm buys 75% of Micropolis Corp.

Remainder becomes new firm, StreamLogic Corp.

CHATSWORTH - A majority share of Micropolis Corp., a high-tech company that zoomed and then crashed over the past few years, has been sold with the remaining assets going to form a new business called StreamLogic Corp.

Roughly 75 percent of Micropolis has been privatized and sold to Singapore Technologies, which is based in Singapore. The remaining assets have been convened to StreamLogic, a public company that will be traded on the Nasdaq market.

Under the deal, Singapore will acquire Micropolis' computer disk drive business and StreamLogic will retain its network information storage operation. The Micropolis name continues to exist but it is now owned by Singapore Technologies.

StreamLogic officials said last week the company was expecting a listing on Nasdaq under a new symbol any day. Micropolis, based in Chatsworth, traded on the Nasdaq under the MLIS symbol.

The sale to Singapore Technologies and the creation of the new company was completed on March 29. Most of the management of Micropolis, including President and Chief Executive Officer J. Larry Smart, has moved to StreamLogic.

Micropolis, a company with $211 million in revenue in 1995, had 2,000 employees at its Chatsworth headquarters before the split. About 1,800 will now work under the Micropolis name for Singapore Technologies.

About 150 of the former Micropolis workers have been transferred to StreamLogic. The remaining 50 workers are no longer employed by either company, said Smart.

Sharing facilities

The new company owned by Singapore Technologies and StreamLogic - at least for the time being - will share the Micropolis building on Nordhoff Street in Chatsworth. In the long term, it is uncertain where either company will end up but a likely scenario is the new Micropolis will stay in the present building and StreamLogic will move, said a source.

But even if StreamLogic moves, it's likely to remain in the Chatsworth area, said the source. Smart commented that StreamLogic's home will remain in Chatsworth.

In addition to the name, Singapore Technologies purchased the disk-drive manufacturing assets of Micropolis for $55 million in cash.

Last year, Micropolis lost $85 million on revenue of $211 million. The company's troubles came to a head in the fourth quarter of 1994 when Micropolis was hit with manufacturing problems caused by supplier delays in delivering parts, said Smart.

The delays caused the company to miss deliveries to clients, said Smart.

Revenues dropped from $110 million in fourth-quarter 1994 to $40 million in first-quarter 1995, with a $35 million loss in the January-March period, said Smart. The value of Micropolis stock dropped from over $11 a share to slightly more than $3, where it has floundered for the past year.

Woes date back

But, said Smart, the problems at the company began before late 1994-early 1995. "The company hadn't been growing for about five years," he said.

Smart, a self-descried turnaround specialist who joined Micropolis in July 1995, said the computer disk-drive manufacturing business was consolidating. Micropolis' competitors were being bought out by larger companies with deep pockets, he said.

"Our market share was shrinking and then the manufacturing problem hit and we lost more market share," said Smart. "We decided the best thing to do was sell the hard disk-drive business and go to work on the video and data storage systems."

StreamLogic will continue to market computer network storage systems that were sold tinder the Raidion, Microdisk and AV Server names, said Smart. In addition, the company will unveil new network and storage systems later this month.

Singapore Technologies is a high tech conglomerate with 1994 revenues of $2 billion and 16,000 employees.