YOU ARE HERE: LAT HomeCollections

Canon to Invest $100 Million in Next Inc., Get Seat on Board

June 13, 1989|From Times Wire Services

FREMONT — Canon Inc. of Japan has agreed to invest $100 million in Next Inc., the brainchild of computer pioneer Steven Jobs, to acquire one-sixth of the privately held 4-year-old company.

The agreement gives Next a hefty financial boost just as it gets set to begin volume shipments of its sleek, black computer workstations.

"We hope this will erase anybody's worries about Next's long-term financial stability, its ability to invest in (research and development) and in manufacturing," Jobs told a group of reporters and industry analysts before a tour of the company's automated factory in Fremont.

The terms of Canon's agreement are essentially the same as those negotiated with H. Ross Perot when he invested $20 million in the company in 1987. Canon will receive a seat on the board of directors of the company and has agreed not to acquire more than 20% of the firm for at least 10 years.

Although Canon's investment was widely expected, most rumors speculated that Canon would invest $20 million in the company.

But Canon's agreement does not include any technology licenses or manufacturing rights--a point Jobs stressed.

Very Difficult Market

As previously reported, Canon also acquired the right to sell Next's computers in Asia as part of the $100-million deal.

"The distribution agreement opens a big market for Next, but the Japanese market has been very difficult for U.S. vendors," said analyst William Lempesis of Dataquest.

Los Angeles Times Articles