Gateway Inc., a struggling computer maker, said Wednesday it will sell its professional business unit to Nampa, Idaho-based computer maker and seller MPC Corp. in a deal valued at about $90 million. MPC will continue to offer Gateway Professional products but will move branding from the Gateway name to the MPC brand within a year. This news follows on an announcement last month where Gateway announced that it was being acquired for $710 million by Acer Inc. of Taiwan.
Under the deal announced today, MPC will take responsibility for operations and warranty support services at Gateway's professional business unit. Gateway will get a 19.9% stake in MPC after the deal closes. As part of the agreement, MPC said it will issue a promissory note to Gateway with a principal amount of about $10 million as of last Tuesday, payable to Gateway within six months of the deal's closing, with a final value based on factors such as the amount of inventory Gateway delivers when the deal is completed. The companies expect the transaction to close in the fourth quarter.