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KOMAG COMPLETES MERGER WITH DASTEK

 KOMAG COMPLETES MERGER WITH DASTEK
 MILPITAS, Calif., Dec. 20 /PRNewswire/ -- Komag Inc.,


(NASDAQ: KMAG) the leading non-captive supplier of sputtered thin-film disks for high-performance Winchester disk drives, today announced the completion of its merger with Dastek Inc., a privately held manufacturer of thin-film recording heads. On Oct. 31, 1991, Komag signed a definitive agreement to merge with Dastek which was subject to the approval of the Dastek shareholders and other customary closing conditions. Also today in a separate press release, Komag announced the signing and details of a definitive agreement with Asahi Glass Co. Ltd. one of its key strategic business partners, to establish a joint venture in the thin-film head business.
 "We are extremely pleased that our negotiations to merge with Dastek have been successfully concluded," commented Stephen C. Johnson, Komag's president and chief executive officer. "Over the past month we have been working closely with Dastek's management team to develop action plans to advance Dastek's position in the rapidly growing thin-film head market -- a market projected by analysts to grow at an average 40 percent per annum rate over the next several years. Our goal is to use our combined technical, financial and management resources to make Dastek a premier player in this exciting market," Johnson continued.
 Under the definitive agreement, Komag acquired Dastek's equity interests in exchange for Komag common stock and options. Komag has issued or reserved for future issuance 2,925,000 shares of Komag common stock to complete this transaction. With completion Dastek became a wholly owned subsidiary of Komag. The transaction will be accounted for as a pooling of interests and, under such treatment, Komag will issue consolidated financial statements for 1991 and prior years that reflect the operating results of Dastek during these periods.
 As part of the transaction, Komag will also issue 75,000 shares of common stock to HMT Technology Corp., a Dastek shareholder, to terminate HMT's right to negotiate a joint venture agreement for the development, manufacture, and distribution of Dastek's thin-film head products in Japan. "Komag will record in its fourth quarter ending Dec. 29, 1991, a charge to earnings equal to the fair market value of these shares as of the closing date. Komag will also expense legal, accounting and investment banking fees associated with this acquisition in its fourth quarter. The combination of these charges is estimated at approximately $2 million," stated Johnson.
 In its recently completed fiscal year ended Sept. 30, 1991, Dastek recorded sales of nearly $51 million and posted a loss of $6.1 million. The loss was attributable in part to reduced shipments in the September quarter from an inventory reduction program at a major customer and various significant one-time write-offs of $7.7 million. "These write-offs included substantial reserves against inventories and accounts receivable," noted Jeffery Bastow, Dastek's chief executive officer.
 "At Dastek during 1992 we will focus our efforts on technical improvements to our current product offerings as well as on new product development in the micro and nano slider areas," commented Bastow. "We will also begin a controlled expansion of our operations in Malaysia to accommodate future sales growth. However, rapid expansion of our sales will not be our primary goal during 1992. We expect to spend substantial sums in our research and development efforts and such spending, in conjunction with moderate sales growth, will adversely affect Dastek's financial results during 1992," Bastow continued. Johnson further commented, "Given this investment strategy, Dastek's operations should have a material dilutive effect on Komag's consolidated 1992 earnings per share. However,our concentrated focus on the development of technically advanced products should provide a solid platform for significant growth in sales and profitability in 1993."
 The products of Komag and Dastek primarily address the fast growing high-capacity, high-performance segment of the Winchester disk drive market. Winchester disk drives are widely used in a broad range of computer applications from mainframes to portable computers. Komag is the leading non-captive supplier of media to this market segment and manufactures the highest density disks commercially available for the 5 1/4-, 3 1/2- and 2 1/2-inch form factors. Dastek is one of the three largest independent thin-film head suppliers to the merchant market. "Both companies provide key enabling technologies that allow increased data storage capabilities in Winchester disk drives," Johnson indicated.
 Based in San Jose, Calif., dastek was incorporated in 1986 and began commercial shipments of thin-film heads in the following year. Dastek maintains 130,000 square feet of manufacturing and administrative space in California and Malaysia. Dastek employs approximately 800 employees worldwide.
 Founded in 1983, Komag and its joint venture subsidiary (Komag Material Technology Inc.) maintain 480,000 square feet of manufacturing and administrative space in California. The company also operates a technical support facility in Singapore. Komag employs approximately 1,700 people. The company manufactures and sells thin-film disk products through its unconsolidated joint venture, Asahi Komag Co. Ltd. which is among the top three media producers in Japan. Komag is traded on the NASDAQ over-the-counter market under the symbol KMAG.
 -0- 12/20/91
 /CONTACT: David H. Allen or William L. Potts Jr. both of Komag Inc., 408-946-2300; or John Trifari of John Trifari Public Relations, 415-349-9812 for Komag Inc./
 (KMAG) CO: Komag, Inc. ST: California IN: CPR SU: TNM


DB -- SF004 -- 4446 12/20/91 14:52 EST
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Date:Dec 20, 1991
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