A buyer has been found for Data Magnetics Ltd, the Shotton, Clwyd based manufacturer of film disk media that was put into receivership last month (CI No 930) – but receiver – Cork Gully has refused to reveal the buyer’s identity. It will say only that the purchaser has signed a memorandum of intent and that Data Magnetics is trading with its support. Sources close to the Welsh company however say that the buyer is a company called Memory Devices Inc, an Israeli consortium of investors. The consortium is known to be anxious to establish a position in magnetic media and has a fund of UKP20m for investment in Europe and the US. Though the exact price paid for the plant is not known it is believed the consortium plans to invest a total of UKP4m in the company and is looking to expand into integrated areas. What will happen when the Israelis take over is a matter for conjecture at this time. The company went into receivership because its investment backers refused to agree to a third round of financing, leading to speculation that yields of media were not high enough or that the business was not viable. The new investors will obviously want to see profits pretty soon, which may lead to some short-term rationalisation. However Data Magnetics will continue manufacturing thin film disks and plans to honour all existing contracts. The deal is due for completion July 15 but an announcement can be expected next week.
