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SALT LAKE CITY (AP) -- Alabama-based Avocent Corp. is acquiring LANDesk Group in a cash and stock transaction initially worth $416 million, the Utah company announced.
LANDesk, a privately held company that is based in South Jordan and is a spin-off of Intel Corp., is to get $200 million in cash, $200 million in stock and $16 million in assumed options.
The transaction value may be increased by up to $60 million if LANDesk meets certain financial targets. The deal is expected to close within 75 days.
Joe Wang, president and chief executive officer of LANDesk, said the acquisition will not affect the company's 500 employees, including about 300 based in Utah.
"We will become a stand-alone business unit within Avocent, but will remain intact," said Dave Taylor, who will continue as senior vice president of marketing.
John R. Cooper, chairman and chief executive of Avocent, based in Huntsville, Ala., said that in the immediate term, Wang will continue as chief executive of LANDesk. The two executives said they still are negotiating a long-term role for Wang.
Avocent reported Thursday that its net income for the first quarter increased to $12.9 million, or 26 cents per diluted share, compared with net income of $1.8 million, or 4 cents per diluted share, in the first quarter of 2005. Net sales for the first quarter increased 23.1 percent to $94.5 million, compared with $76.8 million in the first quarter of 2005.
Its stock tumbled $2.85, or 9 percent, to close Thursday at $28.76 per share on Nasdaq.
Wang said, "Avocent is very strong in delivering hardware management technologies, and we're very strong in delivering software management technologies, and therefore the combined two will become a unique force in the market. This transaction, I believe, is very good for our employees, our customers, our partners and our investors. It's a good return for the investors."
Cooper said Avocent, which has more than 1,300 workers, had been in negotiations with LANDesk since last August.
The company originally was founded in Provo in 1985 as LAN Systems. In 1991, then known as LANDesk Software, it was acquired by Intel.
Wang felt in 2002 that the LANDesk software division was undervalued by Intel. Using his own money, plus capital raised from investors, he put in a bid for the division, partnering with another group also interested in acquiring the company.
(Copyright 2006 by The Associated Press. All Rights Reserved.)
