Gateway Closes on EMachines Purchase

Gateway Inc. on Friday completed its acquisition of eMachines Inc., with eMachines CEO Wayne Inouye taking over the chief executive position at Gateway.

Ted Waitt, Gateway founder and former CEO, will remain as chairman.

Gateway, which announced the acquisition Jan. 30, has been working for more than a year to expand beyond its PC-making roots and into the role as a systems integrator. The company has rolled out enterprise products such as servers and storage appliances, while expanding into the consumer electronics space, with such devices as plasma TVs and digital cameras.

Still, Waitt has said he wanted to continue to grow Gateways core PC business and said the eMachines acquisition will enable him to do that. But the move will do so by getting Gateway, which historically has sold its products directly to customers, into the retail space.

/zimages/3/28571.gifClick herefor analysis of the acquisition.

The eMachines acquisition included $30 million in cash and 50 million shares of Gateway stock, which closed Thursday at $5.19 a share. In total, the deal comes out to about $289 million. The acquisition leaves a number of questions hanging for Gateway, of Poway, Calif., including the fate of its own retail stores. The company last week also announced 1,000 layoffs.