Comarco Acts to Acquire Computer Product Firm

Comarco Inc. of Anaheim said Monday it has signed a letter of intent to acquire SDL Corp., a San Jose-based computer product supplier, through an exchange of stock. The value of the transaction was not revealed.

Don Bailey, Comarco’s director of plans and administration, said the acquisition would give his company access to SDL’s customers, which are primarily large aerospace firms. The four-year-old company’s annual revenues are roughly $1.5 million, Bailey said.

Comarco, which develops computer technology and provides engineering support services for the defense and aerospace industries, expects its 1985 revenues to top $35 million, up $5 million from last year.

All of SDL’s 20 employees are expected to stay on following the acquisition. “One of the key things we purchased was the people,” he said. “The acquisition will bring us technical and managerial personnel and contracts in specialized areas of interest to Comarco,” said Comarco President Glenn D. Buell, Jr.

SDL would complement his firm’s businesses, he said, particularly its COMPUDOC software documentation service, which he said will make an estimated $1 million more this year than 1984’s $2-million COMPUDOC revenues.

He said Comarco is looking at other acquisitions, though nothing as “defined” as the SDL transaction.

Comarco’s buying power has increased in recent months, he said, after it raised $11.5 million in subordinated convertible debentures in a public offering in April. He added that its credit line had been extended from $4 million to $10 million earlier this month, giving Comarco more than $20 million in buying power.

The company’s last major acquisition was the 1981 purchase of Simulated Technologies, Inc. of Ridgecrest, Calif., which accounted for $3.5 million, or about 20% of Comarco’s total revenue in 1982.