Acer To Buy US Cloud Technology Developer iGware For US$320MJuly 21, 2011 No Comments
SOURCE: Wall Street Journal
TAIPEI (Dow Jones)–Taiwanese PC maker Acer Inc. (2353.TW) said Thursday it plans to acquire California-based cloud-computing technology developer iGware Inc. for US$320 million in a cash and stock deal that will enable the company to offer cloud-based products and highlights its continuous drive to grow through acquisitions.
The iGware deal would be Acer’s second acquisition in the U.S. market following its US$710 million acquisition of PC maker Gateway Inc. in 2007. Acer acquired Taiwan’s E-Ten Information Systems Co. and 75% of Packard Bell in 2008, and 29.9% of Italy’s Olidata S.p.A. in 2009. The acquisition comes as Acer has undergone a major shakeup of senior executives including the departure of former chief executive Gianfranco Lanci earlier this year. The company named Jim Wong as corporate president in April to replace Lanci. Acer also said last month it will book a $150 million charge to earnings to write-off disputed accounts in Europe which raised concerns about its overall inventory management.
The rising popularity of mobile gadgets such as tablets and smartphones has spurred demand for cloud computing technology, which allows users to access and store data using the Internet rather than on devices. Major tech companies such as Apple Inc., Hewlett-Packard Co., Intel Corp. and Microsoft Corp. are already expanding into cloud-based services. Market research firm IDC expects the cloud computing market to grow 27% annually over the next five years and reach US$73 billion by 2015.
Acer said in a statement the US$320 million Acer will pay for iGware, which counts Nintendo Co. as a major customer, will comprise US$170 million new shares to be issued by Acer and US$150 million in cash. On top of the acquisition price, Acer has also earmarked US$75 million as a performance bonus for existing staff at iGware. iGware will be renamed Acer Cloud Technology Co. after the acquisition, Henry Wang, deputy spokesman of Acer, told a news conference Thursday.
“Acer Cloud will be the firm’s key differentiator for the next 10 years,” he said.CLOUD COMPUTING, News