Reprint of Amstrad Purchase of Sinclair Research Is End of an Era in British Computer by Paul Hemp, Wall Street Journal, April 8, 1985.
LONDON — Amstrad Consumer Electronics PLC bought the computer business of troubled Sinclair Research Ltd. for the equivalent of $7.3 million.
The sale represents the end of an era in the British computer business. Founded by British entrépreneur Sir Clive Sinclair, Sinclair Research manufactured the first computer to sell in Britain for less than 100 pounds—currently the equivalent of $145 — and says it was the first company in the world to sell more than a million computers.
The sale was unexpected. A sales slump early in 1985 had pushed the once-successful computer maker into the red, forced it to twice reschedule its overdue debt and prompted speculation among competitors that the company might be forced into receivership. But Sinclair said in February that it would begin selling a new model, the ZX 128, and that Sir Clive Sinclair its financial problems had been resolved. Its computer business accounted for about 90% of its revenue last year.
Amstrad, a British microcomputer company, bought the Sinclair brand name and world-wide rights to sell and make Sinclair computer products.
Manufacturing Plans
Amstrad said it plans to begin manufacturing Sinclair computers when contracts with existing suppliers expire later this year.
Alan Sugar, Amstrad’s chairman, said the Sinclair line of computers, less expensive machines designed mainly for home entertainment, would complement Amstrad’s line of business-oriented home computers and word processors.
Mr. Sugar added that Sinclair products, which have been sold primarily in the United Kingdom and several other European countries, will benefit from Amstrad’s world-wide distribution network. Sears, Roebuck & Co. of the U.S. in March agreed to market Amstrad’s Personal Word Processor in the U.S. and Canada.
With the addition of Sinclair’s computer business, Amstrad could. expect sales of $58 million and earnings of between $7 million and $12 million in the first year, said Richard Budgett, an analyst at W. Greenwell & Co.
Amstrad, which sold 750,000 computers world-wide in 1985 and expects to sell one million this year, says it holds about 20% of the U.K. home-computer market, based on units sold. Sinclair, which sold about 400,000 computers last year, holds about 40% of the home-computer market.
Sinclair Selling Stakes
Sinclair also said it will sell parts of its other businesses. It has sold a majority stake in its telecommunications-products business to parties it declined to identify. In addition, Barclays Bank PLC and other investors have taken a minority stake in the company’s semiconductor unit.
When all transactions are complete, Sinclair Research “won’t owe any money and will have some assets,” Sir Clive said. The company rescheduled about $22 million of debt last August, and had paid creditors about $14.6 million before yesterday’s transactions.
As for Sir Clive, he will essentially start over. A new company will be formed to do research for other companies, and Sir Clive and fellow researchers will work on developing new products in a variety of fields. ‘‘I always said I was an inventor,” he said. ‘‘Once a product is developed, I want to get out.”