Softbank shells out for Kingston

The Japanese firm has paid $1.5 billion dollars for the Datrontechsupplier's memory expertise

Datrontech shares fell by a penny to u1.86 after Japanese firm Softbank paid $1.5 billion for its biggest franchise Kingston Technology.

The move sparked industry rumours that Datrontech could itself be a bid target from Arrow, the acquisitive US electronics distributor giant.

Mark Leatham, who will be country manager for Kingston after the takeover, vowed to appoint a raft of channels separate from Datrontech. He said Kingston will stay in the Datrontech office until the completion of its new site in Guildford.

Leatham and 13 other former Datrontech staff now at Kingston will be forced to sell their shares in the distributor as part of the deal.

Softbank Korean-born chairman Masayoshi Son, who now operates from Japan, said he had paid the money for the company because Kingston's influence in memory boards extended beyond hardware to software. Although Kingston is, in effect, an assembler of the DRam chips that make up proprietary memory in its market, it does have a large chunk of business which analysts thought justified the price.

The deal means Softbank, which also owns computer firm Ziff-Davis, will have an 80 per cent share in the company. John Tu and Kingston founder David Sun, will hang on to a 20 per cent stake and ensure the firm performs satisfactorily.

Datrontech has diversified over the past 18 months, specifically to ward off a threat of an acquisition of Kingston.

It heavily promoted the extra edge it had with the distribution agreement to perform its flotation. Then it bought Portable Add-ons in a share swap, which will upset some shareholders, as the price dropped from more than u3 to less than u2 in barely a year.

Other acquisitions include Data Connectivity and Summit Peripherals.