iPhone 14 Pro vs. Galaxy S22 Ultra HP Pavilion Plus Planet Crossword Pixel Watch Apple Watch Ultra AirPods Pro 2 iPhone 14 Pro Camera Best Android Phones
Want CNET to notify you of price drops and the latest stories?
No, thank you

Inacom buys Vanstar

Computer management firm Inacom says it has acquired technology services provider Vanstar in a stock-swap deal estimated at about $465 million.

Giving birth to a substantial technology services company, computer management firm Inacom today said it has acquired technology services provider Vanstar in a stock-swap deal estimated at about $465 million.

Inacom, based in Omaha, Nebraska, designs and installs large corporate computer systems. Atlanta-based Vanstar also builds and manages big personal computer networks for companies and governments.

The merger makes Inacom one of the world's leading technology services companies, with nearly $7 billion in revenues, including more than $850 million in services revenues and 12,000 employees, the company claims.

"This merger was driven by opportunity, not necessity," Bill Fairfield, president and chief executive officer of Inacom, said in a statement. "The changing marketplace has set the stage for the emergence of the 'new' Inacom. With the growing importance of corporations' distributed technology infrastructure, an increasing desire to outsource technology services, and the market's realization that the direct model is 'just not enough' --companies worldwide now demand a services leader like Inacom."

With the Vanstar merger, Inacom said it is now better able to meet the distributed technology infrastructure needs of its growing client base.

Inacom claims it is now one of the largest providers of Intel-based systems in North America and the world's largest provider of IBM, Compaq, and HP products, as well as Lucent Technologies' communications servers.

The merger transaction is expected to be tax-free to stockholders and will be accounted for as a pooling of interests. Vanstar stockholders will receive 0.64 shares of Inacom common stock for each share of Vanstar common stock.

In addition to approving the merger with Vanstar, Inacom stockholders voted to increase the number of authorized shares of Inacom Common Stock to 100 million and approved an increase of 10 million shares of Inacom Common Stock authorized for issuance under the 1997 Inacom Stock Plan.

To assist customers through the merger process, Inacom has established a toll-free Client Action Line--staffed 24 hours a day, seven days a week--as an added resource for clients to raise questions or concerns.

Inacom expects to record a pretax charge in the first quarter of 1999 to cover the direct costs of the merger, including the costs of integrating certain aspects of the businesses of Inacom and Vanstar, the costs of canceling certain purchase commitments, the costs of employee termination and facility expenses to eliminate duplicative functions and locations, and other merger-related items.

The number of any employee cuts was not provided.

Inacom estimates the pretax charge to be in the range of $120 to $155 million. In addition to the merger-related charges, Inacom also expects to incur costs to align the combined company operations to meet the changing conditions of the industry.

The additional costs related to the integration and alignment of the combined company are preliminarily estimated to be from $40 million to $80 million, on a pretax basis.

"The financial picture created by the merger is a very positive one for Inacom," Dave Guenthner, executive vice president and chief financial officer of Inacom, said in a statement. "Not only will the merger provide the critical mass that should enhance our growth potential, but it should also create the opportunity to achieve a larger and more stable platform for future strategic acquisitions. In addition, this transaction is expected to provide Inacom annual savings of approximately $150 million."