Acer to buy iGware for $320 mn
2011-07-22Acer Inc. will buy U.S.-based cloud computing firm iGware Inc for $320 million, as it seeks to move beyond its core hardware manufacturing business. The company claimed it was also in initial talks with Japanese game firm Nintendo, a major client of iGware, over potential cooperation after the deal. Acer has been refocusing on mobile devices to drive future growth after a troubled first half that saw the acrimonious departure of its chief executive after a row over the company's strategy and a series of cuts to its shipment forecasts.
Acer has opened a new global R&D centre in Chongqing, China to enhance development of smartphones and tablet PCs. Acer will also make a further $75 million performance-based payout to iGware as part of the deal. The total $395 million makes the deal the largest Taiwanese buyout of a U.S. company this year, according to market report.
Chairman J.T. Wang said, "The Company will report a loss in the second quarter before returning to profit in the third and post a small full-year profit.Acer was in ICU (intensive care unit) but it has been discharged now. It will be more comfortable in the fourth quarter and return back to normal next year.Nintendo is supportive of the deal and will pay Acer a $20-30 million service fee every year after the acquisition."
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