Gateway agrees to acquire eMachines
Gateway agrees to acquire eMachines
Data storage and PC vendor Gateway is set to acquire eMachines, one of the fastest-growing and most efficient PC companies in the U.S., for about $235 million.
Together, they will create the third biggest PC company in the U.S. and the eighth largest in the world.
The combined company plans to use eMachines' retail relationships and low cost distribution model in the U.S. and abroad to expand the distribution of Gateway's growing base of consumer electonics products beyond its existing direct channels.
Gateway will also replicate many of eMachines' highly efficient and profitable operating models which generated approximately $1.1 billion in revenue last year. This is an increase of more than 40 percent over the prior year.
Under the agreement, Wayne Inouye, eMachines' chief executive officer, will be CEO of Gateway and will be named Gateway's chief financial officer. Ted Waitt, Gateways's founder, will remain chairman of the board, continuing to play an active role in the company's long-term strategic direction, product development and marketing plans and other areas.
The company plans to sell Gateway-branded consumer and business desktop and notebook PCs as well as servers and storage products for the professional market through Gateway's existing direct channels. Gateway will sell eMachines' award-winning desktops and notebooks under the eMachines brand only through third-party retail channels in the U.S. and abroad.
Gateway is currently the number-one seller of plasma TVs in the U.S. and in the past year has introduced a broad line of CE products, including award-winning digital camera, a full line of plasma and LCD TVs, DVD players and recorders, MP3 players and home theatre systems.
Ted Waitt, chairman, CEO and founder of Gateway outlined the benefits of teaming up with eMachines: "eMachines has created an operating structure, growth trajectory and reputation among customers that is a model for the future. They're bringing to Gateway a strong brand that has grown dramatically in value over the past two years relative to its retail competitiors and one of the most capable management teams in the PC world."
Wayne Inoye added: "This new relationship makes perfect sense for us as we continue growing our business and our customer base in the U.S. and abroad. Gateway is one of the most respected brands in the market with innovation that others are scrambling to follow. Gateway has the capital, the scale, the product line and the management expertise to help us dramatically increase our own growth, and all of us at eMachines are excited to be part of the Gateway team."
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