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Gateway Agrees to Sell 55% of Its Stock to Conrac for $5.9 Million

March 23, 1994|DEAN TAKAHASHI | TIMES STAFF WRITER

IRVINE — Gateway Communications Inc., a maker of computer networking equipment, Tuesday agreed to sell 55% of its stock to Conrac Technology Corp. for $5.9 million.

Conrac, a Duarte-based technology company that makes high-resolution computer monitors and other electronics equipment, will buy 6.25 million shares of Gateway stock at 95 cents a share, the companies said.

Conrac is controlled by businessman Ali Hussain, who will serve as chairman and chief executive of Gateway. Patrick F. Cadigan, Gateway's current chairman, will become president and chief operating officer.

Cadigan said in a statement that the Conrac investment will revitalize Gateway, which has 40 employees and reported revenue of $10.4 million last year.

Gateway had a 1993 loss of $2.3 million, or 45 cents a share, compared to a net income of $600,000 on revenue of $20.8 million a year earlier. Cadigan declined comment on Gateway's future plans.

Gateway has shifted its product line in the past two years from making network adapter equipment to creating remote access equipment for companywide personal computer networks known as local area networks.

Remote access equipment sales are growing because of the trend toward home offices and mobile computing. People who work at home or travel on the road can access their computers using Gateway's equipment.

The deal is expected to close before the end of March. Gateway stock closed at about 94 cents, up about 19 cents in Nasdaq trading on Tuesday.

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