NCR Corp.'s Australian subsidiary has bought Memorex Telex from owner Kanematsu Corp. in a move that has seen an exodus of disgruntled Memorex employees. The move comes after Memorex endured months of due diligence investigations by different potential buyers.
Australian Reseller News (ARN) understands the majority of Memorex Telex's senior management team and employees have resigned this morning, together with other staff who resigned some weeks ago and are due to leave at the end of work today.
Kanematsu has been attempting to sell Memorex Telex for some time.
ARN understands a number of companies have considered making offers, including Compaq, Siemens and Datatec.
A source close to the deal said Memorex Telex staff feel jilted by the move because NCR Australia did not contact the company during the process. Rumors have also suggested for some time Memorex Telex staff were considering a management buyout, a move now thwarted by NCR.
Sylvie Sheehan, Memorex Telex's human resources manager, confirmed those rumors and told ARN today that she has resigned "because I didn't want to work for NCR."
"(The management buyout) is something we were very interested in doing," she said. NCR did not give Memorex Telex staff any idea of where it would take the company once the due diligence process was completed, she added.
Kanematsu CEO Noriaki Sakamoto told his staff in an e-mail obtained by ARN that the last four years since Memorex Telex was acquired have been tough.
"During such four years, there were a lot of changes in the company as well as in the industry, and I feel we had always faced to some difficulties. The financial crisis of Asian countries was one of the symbolic difficulty which we have experienced."
Sakamoto also admitted the company has not sufficiently been able to capitalize on the Internet era.
"One of the cause prevented us from doing necessary investment was the lack of financial capacity. It was my regret that KG became not to be able to bring enough fund to this organization, and this was also the biggest reason for KG to decide to look for a new owner of the group as a strategic partner."
It is understood Kanematsu's backer, the Bank of Tokyo, has been pressuring the company to sell off some of its less profitable business units, such as Memorex Telex, for some time.