History (1989): Anacomp Plans Spinoff of Xidex Magnetic Disk Business

Anacomp Inc., which previously said it planned to move away from the unprofitable magnetic business it picked up when it acquired Xidex, late last month for $415 million, announced a plan to create a new wholly-owned subsidiary, Dysan Corp., and to transfer its floppy disk and rigid disk operations as well as some data products to that subsidiary.

At a later point, expected to be next spring, the common stock of Dysan will be spun off to Anacomp shareholders in the form of a dividend. Anacomp will retain pay-in-kind Dysan preferred stock with an aggregate liquidation preference expected to equal 80-90% of the appraised value of the magnetic businesses.

A second class of the preferred stock to be held by Anacomp will be convertible into 40-45% of the common stock of Dysan.

It sounds like a no-lose deal for Anacomp, getting the magnetic business results off its balance sheet and still retaining significant ownership rights should the magnetic business rebound.

Anacomp chairman and CEO Louis Ferrero said: “Separating Anacomp and Dysan will enable the magnetic business … to focus on continuing their improvements in operating results. At the same time, Anacomp will be able to make financial and managerial decisions based on opportunities in its micrographics business.“

Besides, Anacomp reorganized its Data Products Division to merge all domestic data products 3480 and open reel tape marketing and sales into the company’s MultiproduX division.

This article is an abstract of news published on the former paper version of Computer Data Storage Newsletter on issue ≠22, published on November 1989.