Avocent set to acquire software company
LANDesk deal to cost $416 million; sales, profits up
Friday, April 28, 2006
Huntsville-based Avocent Corp. used its first-quarter earnings report Thursday to announce the acquisition of a software firm.
During a conference call with stock analysts, Avocent said its sales for the quarter ended March 31 increased 23 percent over the same quarter last year. Net income was $12.3 million, or 26 cents per share, compared with $7.3 million, or 14 cents per share, for the year-ago period.
Cash flow from operations for the quarter was $16.5 million. Gross margin for the quarter was 59.3 percent, compared with 60.9 percent for the year-ago period.
The company also said it plans to buy Salt Lake City-based LANDesk Group Ltd. for $416 million in cash and stock. The sale is expected to close in July.
Avocent makes tools enabling data center managers and information technology specialists to monitor, repair and control networks from a remote location.
LANDesk is a former software and services division of Intel.
LANDesk, which was spun off from Intel Corp. in 2002, had 2005 revenue of $83.7 million, along with earnings of $7 million before interest, tax, depreciation and amortization.
The company has about 500 employees in 18 countries.
The two companies have worked together for a couple of years, said John Cooper, Avocent's chairman and chief executive officer.
"Avocent's financial strength will provide LANDesk with additional resources to quicken the pace of development and entry into very large enterprise accounts," Joe Wang, president and CEO of LANDesk, said in a prepared statement.
"Avocent also brings sales reach and a large existing customer base."
LANDesk will operate as a "separate business unit under the Avocent umbrella," Wang said.
Teddy Blankenship, Avocent's chief financial officer, said no employment changes are expected for LANDesk as a result of the acquisition.
Blankenship said Avocent expects second-quarter revenue between $114 million and $118 million.
Company officials declined to estimate performance for the rest of the fiscal year.
Avocent shares closed Thursday at $28.76, down $2.85, or 9 percent.
© 2006 The Huntsville Times
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