Datamarine set to rebuild with a $6 million infusion
Published 9:00 pm Thursday, June 21, 2001
By Bryan Corliss
Herald Writer
A Mountlake Terrace radio manufacturer has received a $6 million cash infusion from investors that will allow it to start rebuilding, the company’s president said Thursday.
"It’s certainly better to be going this way than the other," said David Thompson, the president and chief executive officer of Datamarine International Inc. "It’s a big opportunity."
The investment is coming from High Desert Partners LLP, a group of investors that includes some people from the Puget Sound area, Thompson said.
The deal gives High Desert Partners a major stake in Datamarine — 3 million shares of preferred stock at $1 a share, and 6 million shares of common stock at 50 cents a share. The investors also will have the right to nominate four additional people to Datamarine’s current five-member board of directors.
The deal is expected to close within 30 days.
Datamarine has manufactured and sold marine radios for 25 years. In 1992, it received Federal Communications Commission approval to enter a new field, land-based 220 MHz radio service, the type of radios often used by dispatching services and delivery companies.
By 1996, 58 percent of Datamarine’s sales were the new land-based systems.
But late that year, the FCC decided to reclaim the licenses it had awarded four years earlier and sell them at auction. The auction didn’t take place for almost 30 months, during which time Datamarine was blocked from adding new customers.
The issue has been resolved, but the delay cost the company about $5 million, Thompson has said. It also pushed Datamarine’s stock value down and hampered its ability to borrow money.
In April, Datamarine laid off about a third of its then-60-person workforce in an effort to "skinny down" while searching for compatible investors, Thompson said.
"We got there," he said Thursday. "Now we’ve got the responsibility to go forward."
Going forward likely will mean rebuilding the manufacturing force and looking to grow the company through acquisitions, Thompson said. More details will be announced in about four weeks, he said.
