MPC completes deal on Gateway line
The Nampa-based businesses' stock closed up about 14% Tuesday.
IDAHO STATESMAN - By Ken Dey
10-03-07
MPC Corp. finished its purchase of Gateway Computer's professional business line Tuesday.
"This acquisition helps transform MPC into one of the top PC companies serving the professional market, including small-and-medium businesses, education and government," John P. Yeros, MPC chairman and CEO, said in a statement.
The Nampa-based computer maker announced Sept. 5 that it was buying the Gateway division, which sells computers and services to commercial, education and government customers, to better compete with giants like Dell.
The mostly noncash deal was valued at $90 million. The purchase will quadruple MPC's annual revenues to $1.2 billion and more than double the number of MPC employees from 550 to 1,200.
Whether it will make MPC profitable is another question. MPC had struggled financially before the deal. One analyst said the purchase provided an opportunity to help the company, but so far, investors don't appear to be convinced.
On the day the purchase was announced, the company's stock fell 34 cents a share to close at $1.59. On Tuesday, the stock closed at just under 87 cents a share, up nearly 11 cents, a 14 percent rise.
Over the last year, MPC's stock has traded between 60 cents and $2.90 a share.
The purchase gives MPC access to the entire catalog of products and services from Gateway's Professional business line.
Under the terms of the transaction, MPC will migrate these products to the MPC brand within one year. "MPC now has a more diverse and balanced product mix, as well as the scale to compete more effectively against larger rivals in the PC industry," Yeros said.
