Gateway Sells Professional Services Unit to MPC

Gateway is simplifying its organization and divesting ancillary businesses.

Gateway dropped its Professional Services unit in a sale to system builder MPC as the PC maker prepares to be assumed by new owners, Taiwanese PC maker Acer.

The Irvine, Calif.-based Gateway said the sale of its mostly profitable professional business unit makes good on its promise to simplify its organization and divest ancillary businesses.

MPC, of Nampa, Idaho, will acquire Gateway Professional for $90 million, according to officials from both companies. The move comes less than a month after Gateway said it was being acquired by Acer for $710 million.

In the deal, MPC gets a pro division that serves mostly mid-size businesses, government users and education, areas where MPC is also strongly focused. According to MPC officials, Gateway Professional employees will join MPC and continue to work out of the units current headquarters in North Sioux City, S.D. MPC also gets Gateways Consumer Direct SMB business as well as a final assembly facility in Nashville. MPC will take over production of the Gateway Professional products produced there.

MPCs CEO John Yeros said existing customers of both businesses "Will benefit greatly from this combination."


Click here to read more about the Gateway-Acer deal.

"The new company will be totally focused on the markets of government, education and small-and-medium business, and will develop products and services to meet the specific needs of these customers. It will have the scale to enable it to compete better against larger rivals in the PC industry. In addition, our customers will gain access to a wider range of PC products and services and continue to enjoy high-quality, U.S.-based service and support," Yeros said in a statement announcing the deal.

Gateway officials said MPC will continue to offer Gateway Professional products "to ensure product stability for professional customers," but the products will be migrated from the Gateway brand to the MPC brand next year. MPC will assume responsibility for all operations and warranty support associated with Gateways Professional business, valued at close to $60 million. Gateway gets a 20-percent equity stake in MPC Corporation at the close of the transaction.

"I believe that the combination of Gateway Professional and MPC will result in a highly focused organization that can better compete and thrive in this competitive segment," said Gateway CEO Ed Coleman, in a statement.

The deal is expected to close in the fourth quarter, officials said. Meanwhile, MPC has set up a special Web site to keep both Gateway Professional and MPC customers informed and up to date as the deal moves forward.


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