ANAHEIM — MTI Technology Corp., a maker of computer storage equipment, said it plans to raise $40 million to $48 million by selling stock to the public.
In a filing last week with the Securities and Exchange Commission, the company said it plans to use the money from the initial public offering to pay off as much as $23 million in bank debt. The rest would be used for working capital and general corporate purposes, including research and development and potential acquisitions.
The company, recognized last year by Inc. magazine as one of the fastest-growing private U.S. companies, plans to offer 4 million new shares at $10 to $12 apiece. Company executives and shareholders also plan to sell an additional 1.7 million shares that they now hold.
Steve Hamerslag, chief executive, plans to sell 300,000 of his 2.66 million shares. Ray Noorda, who is chairman of MTI and founder of Utah-based network software giant Novell Inc., would sell 650,000 of his 8.06 million shares. Noorda and a venture capital firm that he controls would own about 38% of the 19 million shares after the offering.
The stock sale, for which no date has been set yet, is being underwritten by investment banks Prudential Securities Inc. and Furman Selz Inc., both in New York.
MTI, which has 600 employees, sells systems such as tape libraries that store archives of data. It also sells FailSafe computer systems, which are designed to save data even if power is lost. It generates about 90% of its sales from products that enhance or work with equipment made by Digital Equipment Corp., a computer giant based in Maynard, Mass.
For the fiscal year ended April 3, 1993, MTI reported a loss of $5.7 million, compared to a loss of $12.9 million for the previous 12 months. Annual revenue was $115.7 million, up from sales of $104 million a year earlier.
The loss for fiscal 1993 included a $10.1-million charge for the settlement of a patent infringement lawsuit with Digital as well as costs to shut down the company's Lexcel network management software division. The settlement with Digital forced MTI to drop down two product lines that allegedly infringed on the computer giant's patents. That cost MTI about $6.7 million a quarter in sales.
For the previous year, the company reported a one-time charge of $18.3 million related to the acquisition of the assets of SF2 Corp., a start-up company that owned patented technology for high-end computer systems.
In December, MTI acquired System Industries Inc. in Milpitas. Those costs will be included in results for the current fiscal year. For the nine months ended Jan. 1, the company reported a profit of $1.5 million on sales of $67.4 million. That contrasted with a loss of $11.9 million on revenue of $67.1 million for the same period a year earlier.