In an effort to strengthen its position as a supplier of audio and videocassette tape products, Quantegy Inc. announced it purchased the assets, inventory and intellectual properties of 3M Corp.'s audio and videocassette tape products. Terms of the acquisition were undisclosed.
Quantegy, based in Peachtree City, Ga., and maker of professional audio, video and instrumentation media products under the Ampex and Quantegy brands, will supply 3M's customers with 3M-brand tape products for as long as inventories last, according to a joint announcement by both companies.
Quantegy operates a manufacturing plant in Opelika, Ala., that has about 125 injection molding machines, according to Steve Smith, director of audio tape products.
The plant makes parts for its tape products, but the firm also outsources some molding. Once 3M product inventories are depleted, Quantegy plans to manufacture a compatible product to replace 3M's products.
Quantegy also obtained 3M's professional patents regarding tape formulations, some molds, manufacturing processes for increasing cycle times and output, hanger shippers and tape care packages.
3M, of St. Paul, Minn., an-nounced earlier this year that it planned to exit the magnetic tape business by 1997, a business that represented about $650 million in sales for 3M in 1995.
Too many players each fighting for majority share of a limited market, and the increasingly high cost of raw materials contributed to 3M's decision.
Industry observers believe any consolidation will help the overall market conditions. Some small players left the highly competitive tape industry a couple of years ago.
Most observers expect more consolidations. According to Quantegy President and Chief Executive Officer Jack Kenney, the acquisition will give Quantegy more clout in the professional media market.
Kenney was not available to comment on the impact the acquisition might have on any future expansions of Quantegy's manufacturing operations.