Anacomp Inc, Indianapolis, Indiana seems to have thought better of its $370m acquisition of Xidex Inc, and has decided to spin off the company and related businesses to shareholders. As the first step, it plans to create of a wholly-owned subsidiary to encompass all its magnetics businesses. The announcement was included with the papers filed by Anacomp for an issue of $225m of senior subordinated notes, to be offered through Drexel Burnham Lambert Inc as part of its plan to refinance its long-term debt; it also reached a preliminary agreement to raise its bank credit lines to $375m from $275m. Anacomp will move the magnetic media portions of Xidex, including substantially all assets of the floppy disk and rigid oxide platter businesses and some of Data Products businesses (acquired by Xidex from Control Data Corp), into a new wholly-owned Dysan Corp, with the intention of spinning off Dysan to Anacomp shareholders later. Anacomp holders would receive all the common stock of Dysan, but Anacomp would retain pay-in-kind Dysan preferred stock with an aggregate liquidation preference expected to equal 80% to 90% of the appraised value of the magnetics businesses – that seems to mean that Anacomp would have first call on Dysan’s assets if it went bust – it is presently profitable. A second class of preferred stock, held by Anacomp, would be convertible into 40% to 45% of Dysan’s common. Anacomp would have a seat on the board and provide Dysan with administrative services under a management services contract. Dysan would have its own lines of credit and should neither need nor receive financial support from Anacomp.
