History (1988): Nakamichi to Acquire Mountain Computer

On October 7, 1988, Mountain Computer, Inc. (Campbell, CA) reached a definitive agreement to be acquired by Nakamichi Corporation (Tokyo, Japan) for $45 million in cash.

Mountain will then become a wholly-owned subsidiary of Nakamichi.

Consummation of the acquisition is conditional upon filings with certain regulatory bodies and other customary conditions.

After the acquisition is complete, Mountain will continue to be operated under its current management.

No personnel changes are envisioned and current facilities in Campbell and Scotts Valley (CA) will be maintained.

A result of the acquisition will be a strategic alliance with California Peripherals, Inc. (CaliPer), headquartered in Torrance, CA, affiliated with Nakamichi, and which acts as the exclusive OEM distributor for the Japanese company’s computer peripheral products.

Terms of the alliance include Mountain’s access to the CaliPer tape drive product line, based on technology developed jointly with Nakamichi. This latter firm also has agreements with the German company Hoechst (via a company named Most) to manufacture magneto-optical media.

Jim Sedin, Mountain’s president, said: “Nakamichi is also recognized as the world leader in supplying playing media test equipment. These products will fit very well with Mountain’s line of floppy diskette duplication and certification equipment from a technical and sales channel point of view.”

Nakamichi is one of the worldwide leader in audio tape technology. The Tokyo-headquartered company has been designing and manufacturing sophisticated magnetic recording heads, motors and precision recording mechanisms as well as compact disk players for the high-end home and professional audio recording industry since 1953. Since 1985, the firm has been using this technology in the development of products for computer storage. As a result, Nakamichi now is involved in quarter-inch and half-inch tape drive technology and manufacturing. Its expansion strategy is now taking shape with its affiliation to CaliPer and its acquisition of Mountain Computer. Both represent the next chapter in Nakamichi’s effort to address the board market opportunities through US OEM and retail channels.

Mountain Computer, Inc., founded in 1977, now reports over $60 million in annual revenues. It provides user interface software and a family of backup products ranging in capacity from 40MB to over 2GB. It markets its products through retail distribution channels both domestically and internationally.

Computerland, Entre Computer Stores, MicroAmerica, and Micro D are typical customers.

Over six years, Mountain has shipped over 500,000 units to PC market end users.

This article is an abstract of news published on the former paper version of Computer Data Storage Newsletter on issue ≠9, volume ≠1, published on November 1988.