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Gateway buys ALR
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June 19, 1997: 6:47 p.m. ET
Computer maker says $194 million purchase allows it to grow server line
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NEW YORK (CNNfn) - Computer maker and retailer Gateway 2000 Inc. said Thursday it was acquiring Advanced Logic Research Inc. for $194 million, or $15.50 a share.
The acquisition will give Gateway 2000 access to Irvine, Calif.-based ALR's high-end client/server and high-performance desktop innovations.
ALR's board of directors has already unanimously approved the offer and recommended that ALR stockholders tender their shares.
"Combining Gateway and ALR represents a tremendous opportunity. The new relationship gives Gateway immediate access to established server technology, a key component of the growth strategy for our enterprise line," said Ted Waitt, chairman and chief executive officer of Gateway 2000.
Gateway 2000 shares closed up 1-1/8 to 33-1/8 and ALR stock ended up 2-1/8 to 14-1/8.
Gene Lu, president and CEO of ALR, said combining Gateway's expertise in the build-to-order market with ALR's products will give customers a wider array of products and solutions.
"This is a great next step for ALR. We will continue to build our reseller channel relationships and serve our customers through this channel. Our customers and channel partners will benefit from lower component costs and purchasing benefits. This will allow us to deliver even greater value and to serve our markets even better," he said.
ALR will operate as a wholly-owned subsidiary of Gateway and continue to market its products under the ALR brand. Lu will remain president of ALR and will become vice president and an officer of Gateway.
Gateway expects to pay for the acquisition through a one-time, non-cash charge. The company said it will commence a tender offer for outstanding ALR shares by the end of next week.
--Cyrus Afzali
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