Tech firm lays off 30 at site in Orono EnvisioNet closes deal with Microdyne

BANGOR – On its last day as an independent company, bankrupt EnvisioNet Computer Services Inc. laid off 30 workers in Orono before completing its sale to Microdyne Outsourcing Inc. of Torrance, Calif.

Microdyne, a subsidiary of L-3 Communications, is paying $10.7 million for most of EnvisioNet’s assets. A federal bankruptcy court judge in Portland signed off on the completed deal Thursday.

The deal includes $4.4 million in cash and $6.3 million in certain assumed liabilities.

“It is official!” company founder Heather Blease wrote in a memo to employees Thursday afternoon. “We look forward to sharing more details with you over the next several days and introducing you to John Oakes, the president of Microdyne.”

What Blease’s role will be under the new ownership is not known.

Thirty of the employees, however, will not be at the meetings after being given pink slips Thursday morning. It is unclear whether some of the workers will be asked to help out in Augusta, where most of EnvisioNet’s customer and technical support for Dell Computers is handled. Dell recently expanded its contract with EnvisioNet.

EnvisioNet spokesman Anthony Citrano said the layoffs were not at the instruction of Microdyne.

“It had nothing to do with the closing,” Citrano said. “One of the company’s largest clients has been consistently dropping its call volume. This was planned for quite a while.”

Jennifer Barton, a spokeswoman for L-3 and Microdyne, said EnvisioNet alone determined that layoffs were needed.

Microdyne and EnvisioNet officials were not available to comment on the merger. Instead, the new owners only would release a statement about the acquisition. L-3, which is a publicly traded company (NYSE: LLL), waited until after the stock markets closed to send out the press release.

L-3’s stocks closed at $67.69 on Thursday, down $2.44. In the last year, the highest it was traded at was $91 while it’s low was $51.8750.

According to the statement, “Microdyne expects to spend the coming weeks consulting with management, clients, vendors and employees to begin integration of the two high-quality operations.”

In the release, Oakes stated, “We feel fortunate to be the company selected by the creditors’ committee, the company and the court to help EnvisioNet continue to build on the great potential that the founders and management team have foreseen from the beginning.”

EnvisioNet started seeking a buyer in June after it was forced to file for Chapter 11 bankruptcy protection because of a significant reduction in call volume from one of its largest clients, Microsoft Network. EnvisioNet employees handle tech support calls from customers using MSN or Dell Computer software applications.

Because of the reduction in workload, EnvisioNet in May laid off more than 600 people and closed its Brunswick office. Earlier this year, EnvisioNet had nearly 2,200 employees.

The company now employs about 960 people in its offices in Orono and Augusta. Until June, EnvisioNet had annual revenues of $30 million, assets of $15 million and liabilities of more than $25 million.

Although the merger is complete, the bankruptcy proceedings for EnvisioNet are not over. Robert Keach, an attorney for EnvisioNet’s creditors, said recently that some residual assets still need to be liquidated, including the sale of the company’s former headquarters in Brunswick.

Selling the company, though, “was the hard part by some respects,” Keach said.

What also needs to take place is a meeting of creditors with claims against the company, which is considered a standard bankruptcy court procedure. At some creditors meetings, the bankrupt company tells creditors what actions led to it filing for Chapter 11. The meeting is scheduled for Sept. 11 in Portland.

Jack Manheimer, an attorney for the Orono Economic Development Council, said recently that this meeting is unusual in that it is being held after a company has been sold. The reason the meeting is delayed for EnvisioNet’s creditors is because the company was given more time to file a detailed schedule of its assets and liabilities.

The Microdyne deal does include $875,000 to pay employee retention bonuses, plus vacations and sick time for workers.

Microdyne and OEDC still need to negotiate terms of a lease on the Orono facility. OEDC had loaned EnvisioNet more than $7.3 million – $5.3 million in a lease on a facility it built for EnvisioNet to use, and $2 million in loans to purchase equipment.

Until then, Microdyne is subleasing the building from EnvisioNet. By Oct. 12, Microdyne and OEDC will decide whether Microdyne will assume the lease, renegotiate it with OEDC, or terminate it, Manheimer said.

Microdyne was established in 1991 to give technical support for hardware and software products, and expanded to integrated product repair. In 1998, it was purchased by L-3, a $2 billion service-oriented company with 15,000 employees. Its customers include the Department of Defense, selected government intelligence agencies, major aerospace and defense prime contractors, foreign governments and commercial customers, according to Microdyne’s Web site.