The Ultrasystems lease deal with Koll was complicated, according to real estate brokers familiar with the deal, because Hadson Corp. is suffering from a 1988 buying spree.
That year it bought Ultrasystems, which stock analysts thought was a good deal, and a defense contractor subsidiary of Singer Co., which turned out to be a dog.
Loaded with debt and losing money, Hadson appointed some new top executives last year and began considering which parts of itself to sell. It has already disposed of the former Singer subsidiary and the defense portion of Ultrasystems' business; now for sale is the larger part of Ultrasystems, which builds and owns power plants that burn gas, coal, wood and other forms of alternative energy.
Ultrasystems took in nearly $70 million in 1989, the last full year for which the parent company disclosed results for its subsidiary, and operating income of $6 million. That was about 10% of Hadson's $700 million in revenue that year, although revenue has shrunk since Hadson began selling off subsidiaries last year.
Raising the huge amounts of capital needed to build power plants doesn't seem attractive anymore to debt-burdened Hadson, said stock analyst Daniel L. Tulis of Shearson Lehman Bros.
Hadson won't say how much it is asking for Ultrasystems, which companies may be interested in buying or when a sale might occur. But Tulis says a logical buyer would be a sizable electric utility.
J. Michael Adcock, Hadson president, says Hadson has narrowed down a fairly large list of buyers interested in Ultrasystems.
He expects to name a buyer this spring and conclude a deal by summer.