LANDesk bought out

Software maker LANDesk Group Ltd. announced Thursday it has signed an agreement to be acquired by Alabama-based Avocent Corp., a maker of equipment for computer networks, for $416 million.

The deal provides privately held LANDesk, which is based in South Jordan and is a spin-off of Intel Corp., with $200 million in cash, $200 million in stock and $16 million in assumed options. The transaction value may be increased by up to $60 million if LANDesk meets certain financial targets. The deal is expected to close within 75 days.

Joe Wang, president and chief executive officer of LANDesk, said the acquisition will not affect the company's 500 employees, including about 300 based in Utah.

"We're fully expected to operate the same way as we have been," Wang said. "We want to continue to grow our business and continue to lead the market. I do not expect any changes in other offices worldwide."

John R. Cooper, chairman and chief executive of Avocent, based in Huntsville, Ala., said in the immediate term Wang will continue in his role as CEO of LANDesk. The two executives said they are still negotiating a long-term role for Wang.

News of the acquisition sent Avocent's stock tumbling $2.85, or 9 percent, to close Thursday at $28.76 per share on Nasdaq.

"I'm sure that there are people who will feel we paid too much, and I'm sure Joe is sitting here feeling we didn't pay enough," Cooper said. "I can assure you that we have had a fully negotiated exchange. In that context, I'm absolutely sure it's a fair price."

While the price of its stock fell, Avocent offered some good news for investors Thursday, reporting that its net income for the first quarter increased to $12.9 million, or 26 cents per diluted share, compared with net income of $1.8 million, or 4 cents per diluted share, in the first quarter of 2005. Net sales for the first quarter increased 23.1 percent to $94.5 million, compared with $76.8 million in the first quarter of 2005.

"I would hope that by virtue of combining the two companies and combining our sales channels and customer relationships that we are able to expand both," Cooper said. "It is our fervent hope that LANDesk will expand. That's in all of our interest that that occur."

Wang said other suitors were interested in buying LANDesk, but he would not give details.