Tuesday, Avocent Corp. (AVCT), a provider of IT operations management solutions, announced that it completed the acquisition of Touchpaper Group Ltd, a privately-held UK-based provider of IT business management solutions, for about $45 million. The company also announced that it signed a definitive agreement to acquire the assets and liabilities of Ergo 2000, Inc., a California-based privately-held provider of rack-mounted LCD consoles, for about $27.5 million. Avocent expects each acquisition to be accretive to operational earnings per share in 2008 and expects to close Ergo 2000 acquisition later this quarter.
Following the acquisition of Touchpaper, Avocent plans to integrate Touchpaper technology with its management software and platforms to bring service desk functionality to data centers. The company believes that this acquisition can extend its portfolio of incident management, problem management and service desk capabilities.
With the Ergo acquisition, the company expects to further expand its portfolio of advanced rack management products. The use of LCD rack-based consoles can reduce the time for diagnosis and remediation of problems in the data center and can enhance switch capability and provide a means for spotting problems with any servers in the rack and quickly resolve them before causing system downtime.
According to Avocent, the purchases will be funded from its cash and line of credit.Touchpaper and Ergo 2000 generated revenues of about $34 million and $33 million in 2007, respectively.
AVCT closed Monday's session on Nasdaq at $18.60, on an average 3-month volume of 563K.
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