Acer Inc (宏碁), the world’s No. 4 PC maker, yesterday said it planned to acquire US cloud-computing company iGware Inc for US$320 million in cash and share swaps, enabling it to offer private cloud-computing services for its users on Acer’s notebook and tablet computers in an effort to make a comeback from recent setbacks.
Under the deal, Acer would also pay US$75 million for performance-based earn-out.
IGware makes up to US$30 million in revenue a year -helping Japanese game console maker Nintendo Co offer cloud-computing services, such as online payment services, for users, according to Acer.
The latest acquisition came after a series of operational restructuring and management reshuffles at Acer, where former chief executive Gianfranco Lanci resigned in March over disputes with the company’s board over corporate strategies and Acer’s lackluster financial results.
“Acer’s operation is stabilizing after restructuring programs and a drastic inventory write-off in the second quarter, which will cause some losses,” Acer chairman J. T. Wang (王振堂) told a media briefing at the company’s Xizhi (汐止) headquarters in New Taipei City.
Last month, Acer announced it would book US$150 million in inventory write-offs and lay off 300 employees from its European operation because of slack demand.
“We believe Acer will return to profitability in the third quarter and the fourth quarter will be even better. We have a good chance to eke out a profit for the full year,” Wang said.
The company has reduced 20 days of inventory over the past quarter, bringing the inventory down to a normal level, Wang said. Acer planned to shrink inventory by -another 20 days this quarter, he said.
Acer is expected to lose NT$1.26 billion (US$43.6 million) in the second quarter, JPMorgan forecast. For the whole year, the company is estimated to make NT$4.45 billion in net profit, a decrease of 72 percent from last year’s NT$16.12 billion in net profit, according to JPMorgan.
With shipments down 10 percent quarterly last quarter, Acer’s global market share fell to 10.9 percent in the second quarter, from 12.4 percent in the first quarter, relinquishing third spot to China’s top PC company Lenovo Group (聯想), IDC reported earlier this month.
“We are positive about the third and the fourth quarters and PC sales will recover gradually ... We plan to launch the world’s first 7-inch tablet device powered by the latest Android 3.2 version soon. In the fourth quarter, Acer will launch Ultrabooks, high-end models with retail prices as high as US$1,000 each,” Wang said. “We do not see consumers buying fewer Acer products. The sell-in and sell-out look quite good,” he added.
Acer said iGware will hold a 4.5 percent stake in it after completing the transaction on Sept. 30. Each iGware share will be swapped for 4.24 shares in Acer, according to a filing with the Taiwan Stock Exchange.
Shares in Acer rallied 3.63 percent to NT$41.35 on speculation that the company was going to announce a major merger-and-acquisition deal. Acer unveiled the iGware deal after the local stock market closed.
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