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Convicted Inside Trader Emerges From Seclusion : Computerbase Enlists Thayer to Guide Growth

July 05, 1987|WARREN VIETH | Times Staff Writer

It has the makings of a classic comeback. Computerbase International Inc., a small firm that is long on ambition but short on cash, has turned to a fallen giant of the aerospace and defense industry to help guide its future growth.

The Irvine-based company has enlisted the expertise of W. Paul Thayer, the former fighter pilot ace, deputy defense secretary and Fortune 500 chief executive whose high-flying career was scuttled by a 1984 insider trading scandal.

Thayer, who spent a year in federal prison and six months in a halfway house program, was released from custody only six months ago. Now he has emerged from seclusion to join Computerbase as a director, chairman of its executive management committee and president of a new division.

His mission, said Computerbase President Richard Manweller, is to raise nearly $9 million to complete development of a new defense-related computer system. Thayer will also help the company market the product and oversee Computerbase's long-term growth strategy.

At 67, Thayer will be starting almost from scratch.

Tapped for Knowledge

The last company he captained, LTV Corp. of Dallas, was generating $6 billion in annual sales when Thayer resigned in 1983 to accept President Reagan's invitation to serve as second-in-command at the Pentagon.

Computerbase reported a mere $2 million in revenue last year along with a net loss of $463,000.

"We'd have to be in operation for 10 years before we'd begin to have the knowledge and reputation of a Paul Thayer," Manweller said.

"Mr. Thayer is a very astute businessman. His knowledge is based on about 40 years of experience in the aerospace industry. That experience will be invaluable to Computerbase," Manweller said.

Thayer, who lives in Dallas, declined, through Manweller, to be interviewed.

Manweller believes that with Thayer's assistance, Computerbase's annual sales can skyrocket from $2 million to nearly $200 million within five years. That quantum leap would be based on the strength of one product line alone, a computer system designed for defense applications ranging from missile guidance to aircraft avionics.

Thayer's involvement with Manweller, who founded Computerbase five years ago, is the result of an introduction made in March by a mutual friend and financial adviser whom Manweller declined to identify.

"He introduced Paul to me and the rest of the board," Manweller said. "It became immediately obvious to us how important Paul could be to our company. I think it also became obvious to Paul that he was ready for a new career."

In the past, Computerbase derived most of its revenue from contracts to design and develop custom computer systems and telecommunications equipment for large manufacturers such as Xerox, Teledyne and Honeywell.

Seeks Own Products

Although it still relies on contract work as its core business, Computerbase is pinning its ambitious growth plans on the development of its own proprietary computer products.

The first such product is called ALPS, an acronym for ADA Language Processing System. ALPS is a combination of computer hardware and software utilizing the ADA computer language chosen by the government for use in future defense equipment. Computerbase already has plowed $1 million into the development of ALPS but needs another $6 million to $9 million to complete the job.

Robert Hanisee, a defense analyst with Seidler Amdec Securities in Los Angeles, said ADA-based computer systems are a potentially huge market, but the competition will be fierce and the payoff may be years away.

"While these may be very clever people and they may be capable of developing a very nifty little ADA processor, my guess is it's going to take them a long time to get anywhere," Hanisee said.

"Still, it's an interesting hookup. (Thayer) is well regarded in the business community. He's a bright guy."

Computerbase's ALPS program will provide Thayer with an unusual opportunity to renew his contacts and re-establish his credentials in defense circles. According to one associate who requested anonymity, the chief executives of several major corporations have expressed no reservations in recent months about dealing with Thayer.

"There isn't anyone who won't support him," the associate said. "His friends are still there."

Manweller would not discuss Thayer's past legal problems or what effect his conviction and jail term would have on his ability to serve the company.

Closely Held Firm

Thayer will become Computerbase's fourth director, joining Manweller, Chief Financial Officer Theodore Aroney and major shareholder Paul Stout. Although Computerbase became a public company last year, about 80% of its 100 million shares are held by a small group of insiders and associates. The remaining 20% is traded by a handful of over-the-counter "market makers." The stock has been selling recently for about 25 cents per share.

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