Personal Notes on the Merger

On February 28, 1990, WILTRON became a part of the ANRITSU family. Each of the employees received very nice letters from Sugai-san and from Mr. Dunwoodie. These letters culminated a series of discussions, initiated by Goldman Sacks, our financial advisors, proceeding to talks with several interested companies, and winding up with the agreement for the ANRITSU acquisition of WILTRON stock and the subsequent merger of our companies. Since my objective in the merger was to free myself from running WILTRON, I felt that I had to honestly tell that to our merger partner. This meant that Duane Dunwoodie had to prove himself to the merger partner because he was the one they would count on to run the company. Duane was the one therefore to handle the formality of the merger talks. So he, more than anyone else, consummated the merger. His years of working with foreign customers, particularly Japanese, served him very well in this international deal.

Some of the well-known acquisitions that you read about are made for strictly financial reasons, to capitalize on an undervalued stock—perhaps some understated assets. Ours was not a “financial” merger but rather a “strategic” merger. Both ANRITSU and WILTRON make the highest quality instruments as well as other communications products; we sell to many of the same customers around the world. It is interesting that with so much in common there is only minimal competition between our products. WILTRON and ANRITSU are a good “fit.” I never will forget the way Saji-san put it when he said “Obviously, 1+1 equals 4.” Saji-san is an officer of the Sumitomo Bank and a financial advisor to ANRITSU. His hard work and enthusiasm helped make our deal possible.

An interesting sidelight shows what a small world we live in. Without realizing that we were talking to ANRITSU, my old friend Gottfreid Lang (from our German sales office) called telling us we should talk to ANRITSU. I knew then that we were on the right track.

I promised earlier to explain my use of the term ANRITSU family. Well, when Duane Dunwoodie and I were in Tokyo we met ANRITSU’s chairman and presidents who among them have served for the past 50 years. Some are retired but are still helping as advisers—now that is truly a family isn’t it?

Each of us at WILTRON had our own reaction to the merger. It was a new idea to most of our employees, but those that I have heard from seem pretty positive. From my own personal point of view, I am relieved. Before the merger I felt like a man holding a tiger by the tail; how to let go? I wanted to leave WILTRON in good hands and start on my next career in Napa. However, I felt an obligation especially to our old line employees who had all their savings tied up in WILTRON stock. And I also felt a strong obligation to the WILTRON of the future and those employees with their personal careers tied to that future. Going public wouldn’t have satisfied either obligation. The market valuation of high tech companies was pretty low at the time.

The merger was a good solution, a win for everyone involved. WILTRON got a very good price for our stock. If we had done more bargaining we could have probably got more but there are times not to be greedy for we could not have gotten a better merger partner than ANRITSU and we wanted to get started off with them on the right foot without making it difficult for them. Although I would have preferred to start up my winery right away, instead, I agreed to remain for two years and found myself working hard along with Duane Dunwoodie to get WILTRON launched into our exciting new merger relationship. I had agreed to help; it was my duty but also my pleasure working with such receptive gentlemen from Japan.