After months of negotiations, Micron Electronics Inc. announced April 11 it had acquired Inacom Government Systems Inc. for an undisclosed cash amount.
After months of negotiations, Micron Electronics Inc. announced April 11
it had acquired Inacom Government Systems Inc. for an undisclosed cash amount.
Through the purchase agreement, Micron will acquire Inacom's government
contracts, vendor reseller agreements and General Services Administration-
approved purchasing vehicles. Micron plans to close Inacom's Vienna, Va.,
office and retain about 16 of the 50 employees from that office. Micron
also will assume Inacom's telephone numbers and World Wide Web sites.
Inacom will be available to answer customers' questions until the last
contract is transferred to Micron. But at that point, "Inacom will cease
to exist," said Harry Heisler, vice president and general manager of Micron
Government Computer Systems Inc.
Inacom made its presence felt in the federal market in 1998 through
its acquisition of distributor Vanstar Corp. Vanstar likewise had increased
its presence in the federal market largely through its acquisition of Sysorex
Information Systems Inc., a PC reseller and systems integrator that focused
primarily on the federal market.
According to Heisler, Micron decided to purchase Inacom because of its
success in systems integration, service capabilities and seat management
contracts, as well as its leasing capabilities. The addition of services — such as systems analysis, network design and integration, systems installation
and integration, training, maintenance and technical support — will enable
Micron to be more competitive against market leaders such as Dell Computer
Corp., according to industry experts.
"This acquisition enriches the options we're able to offer and, along
with e-service enhancements we're making on our GSA schedule, [will] better
position Micron as a leader in helping government keep pace with the evolution
to an Internet-centric society," Heisler said.
But according to industry experts, Micron's decision to cut employees
may indirectly affect the company's success. "Most of the time when you
acquire a company, you buy it for the people, not just to acquire the contracts,"
said Chip Mather, vice president of Acquisition Solutions Inc. "The success
of the company will depend on the ability of the different cultures to come
together. If you replace one culture with another, you're just buying contracts."
Micron has the ability to fulfill Inacom's government contracts, and
services to customers should not be disrupted, Heisler said. "We worked
with Inacom on a number of contracts," he said. "We will now be the prime
listed on the contract instead of being a subcontractor."
Although government customers have not received many details of the
acquisition, many said they were not concerned about Micron's ability to
meet their service needs.
"It is not unusual, given the sensitive nature of such an acquisition,"
said Lt. Col. Glenn Taylor, director of the Commercial Information Technology
Product Area Directorate (CIT-PAD) at the Gunter Annex of Maxwell Air Force
Base, Montgomery, Ala.
CIT-PAD, part of the Air Force Standard Systems Group, awarded Inacom
a blanket purchase agreement for rugged portable computers as part of its
Information Technology Tools program in April 1999. "We look forward to
hearing the plans for integrating the two companies and their products and
service offerings," Taylor said.
Inacom and Micron have been working to solidify a deal for more than
three months, according to Heisler. In December, Inacom decided it was not
in the company's best interest to stay in the federal market, and the approach
of government resellers, such as GTSI and Intelligent Decisions Inc., to
purchase the $140 million subsidiary, finalized the corporation's decision.
The sale of Inacom Government Systems comes two months after Compaq Computer
Corp. purchased Inacom Corp.'s customization and logistics division.
Through that deal, worth $370 million, Compaq took control of Inacom's
PC distribution and formed a new subsidiary called Custom Edge. The Compaq
sale was finalized Feb. 16 and was part of Inacom Corp.'s companywide restructuring.
NEXT STORY: Study: West Coast in digital lead