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May 29, 1997updated 05 Sep 2016 12:59pm

DESPERATE FOR CASH, ENCORE SELLS STORAGE BUSINESS TO SUN

By CBR Staff Writer

Encore Computer Corp, the storage and data retrieval company that with its horrendous mounting losses has been a thorn in the side of Gould Inc ever since the latter was bought by Nikko Kyodo Co Inc in the early nineties, is to sell its storage products business to Sun Microsystems Inc for around $185m. The question is, what will it have left? It still has its Reflective Memory technology, which it licenses to Digital Equipment Corp, under the name Memory Channel, but it seems DEC has enhanced the product without passing the changes back to Encore (CI No 2,934). However, the company that bills itself as ‘the world’s leading innovator in data storage, data retrieval and data sharing, is selling the assets, products and technology of its storage business apparently to cancel its debt and outstanding convertible stock held by Gould (CI No 2,159), although the proceeds of the sale are likely to be substantially less than its debt to Gould. Encore’s results have been so bad in the past couple of years, that it has taken to reporting quarter by quarter, and leaving out the year to date figure. The company reported losses for the year to March 31 of $70.7m on revenues of just $47.6m. The purchase makes good sense from Sun’s point of view, since the company has shown an increasing interest in the high level storage market (CI No 3,138), but it is hard to see how Encore will sustain a viable business with what it has left.

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