Alvey Holdings, Inc. (now known as Pinnacle Automation, Inc.) and Alvey, Inc. have requested Federal Trade Commission approval to divest all of the assets of Alvey, Inc.'s wholly- owned subsidiary, the Diamond Machine Company, to Diamond Phoenix Corporation, a newly-formed corporation owned by David J. Smith and Walter J. Nott. The FTC is seeking public comments on the application for 30 days, until July 3.
Pinnacle and Alvey, Inc. are based in St. Louis, Missouri. Diamond Phoenix Corporation, based in Madison Heights, Virginia, was formed to operate and enhance Diamond Machine Company's hori- zontal carousel business. Diamond Machine Company's business will continue to operate out of its current location in Lewiston, Maine. Horizontal carousels are computer-driven storage and retrieval devices often used in warehouses and in manufacturing. David J. Smith also owns IMH of Lynchburg, Inc., which is engaged in the related business of manufacturing and installing heavy duty pallet-type conveyer systems and transporters.
(This is the second divestiture-approval application Pinnacle and Alvey have submitted for the Diamond Machine Company assets. The first was withdrawn when Dexter Shoe Company, the earlier-proposed acquirer, terminated its agreement with Alvey to purchase the assets. The application announced today amends the second application filed by Pinnacle and Alvey, Inc., by which they requested approval to divest the Diamond Machine Company assets to IMH of Lynchburg, Inc. IMH subsequently assigned its rights under the asset purchase agreement to Diamond Phoenix Corporation. Pinnacle and Alvey, Inc. submitted the amended application to reflect that assignment.)
Prior FTC approval of the divestiture is required under a March 1994 consent order settling FTC charges over Alvey Holdings' plan to acquire White Storage & Retrieval Systems, Inc., its principal competitor in the manufacture and sale of horizontal carousels. The FTC alleged that the acquisition would violate antitrust laws by substantially reducing competition in the U.S. market for horizontal carousels, possibly resulting in higher prices. Among other things, the consent order requires Pinnacle to divest horizontal-carousel manufacturer Diamond Machine Company to an entity that will operate it in competition with Pinnacle.
Pinnacle maintains in its application that the divestiture would "have an entirely pro-competitive impact" in the horizontal carousel market because Diamond Phoenix Corporation is a financially-sound buyer, would be a new competitor in the market, and has "both the financial resources and the technical exper- tise" to develop the software necessary to compete effectively in the market. Diamond Phoenix Corporation also will benefit from IMH's strong knowledge base as a dealer for White Storage & Retrieval Systems products, the application states.
Comments on the application should be addressed to the FTC, Office of the Secretary, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580.
Copies of the application as well as other documents associated with this FTC case are available from the FTC's Public Reference Branch, Room 130, same address as above.
(FTC Docket No. C-3488)