British company
buying Honolulu
tech firm for
$51 million
Adtech's owners may get
By Russ Lynch
another $25 million based on
the company's growth
Star-BulletinA 30-year-old Honolulu company that has quietly built a worldwide market for its high technology products is being sold to a British company for $51 million. Kaimuki-based Adtech Inc., which makes advanced testing equipment for high-speed digital telecommunications systems, will be acquired by London-based Bowthorpe Plc, which makes electronics for the automobile, computer and telecommunications industries.
Bowthorpe said Adtech at the end of last year had assets of $8.4 million and the company had a pretax profit of $5.2 million last year.
The British buyer also said today that it will pay another $25 million to the Hawaii company's owners depending on profits over the next two years as Bowthorpe builds the business.
Adtech's president and co-owner Kathryn Weldon said that management and the company's 65 employees, most of whom are products of the University of Hawaii electrical engineering department, will remain.
"We're running the company. We're still the management of the company," Weldon said.
The privately held company has two other co-owners, Weldon said, but she declined to name them.
State business registration records show Adtech officers as Kathryn Weldon, president; Michael Gouveia, vice president; and Carl Uyehara, secretary and treasurer. All three are listed as directors.
Weldon's husband, Edward J. Weldon Jr., then an associate professor of electrical engineering, founded the company in 1967 with two other UH faculty members, to develop digital communications equipment.
What made Adtech attractive to Bowthorpe is the Adtech's leading role in a specialized area.
About three years ago, Adtech saw sales grow strongly for its test equipment for manufacturers of high speed digital telecommunications network equipment. Adtech's products test hardware that uses asynchronous transfer mode, a relatively new method of high-speed digital communications.
Proponents of this method are using it to try to develop, for example, a much bigger and faster Internet, for applications such as on-demand video.
Bowthorpe, which described Adtech as "strongly cash generative," said it expects the deal to close this month and believes Adtech will contribute to Bowthorpe per-share earnings from the start.
The British company said Adtech fits in well with its plans to build up the telecommunications side of its business.
Bowthorpe has about 7,450 employees and had a pretax profit of $116 million in 1996.
Bloomberg News contributed to this report.
