The acquisition of Pericom by Ferrari is not the end of the road either for Pericom or for its founder and chairman Ron Cragg, since Ferrari wants only the maintenance side of the business. However, Cragg, seeing an opportunity to take his company private once more has sold it in order to buy two-thirds of it back again. For UKP800,000 in cash, payable to Ferrari, Cragg will get Pericom’s UK manufacturing business, its three overseas subsidiaries and most of the UK distribution business. The net tangible assets of these businesses are worth UKP2.8m. Under the deal, Cragg will also get the lease of Pericom’s headquarters in Cosgrove, Milton Keynes which will be surrendered by Pericom for a sum of UKP50,000. He will also receive UKP80,000 for entering restrictive covenants and UKP30,000 for retiring from office. Cragg’s new business will trade under the name Pericom Technology Ltd and, under a three year agreement, Pericom Technology will recommend that all its products in the UK be maintained by Ferrari’s new enlarged maintenance business. Pericom has reported a pre-tax loss for the year to September 30 of UKP718,000 on turnover that struggled up 4% to reach a little over UKP19m. Of the maintenance part of the company which Ferrari covets, Cragg says that it is a division adversely affected by bad debt provisions; distribution saw turnover up 26%, while the manufacturing of monochrome terminals continues to be phased out and now only accounts for 31% of group turnover. However, the manufacture of colour terminals in Singapore has taken off and produced a profit, as the French subsidiary Monterey Technology (a clone of the pre-Ferrari Pericom) saw its turnover rise by more than 40%. However, Pericom’s subsidiary in the US continues to struggle. Cragg was not available to comment further on his future prospects.
