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June 20, 1997updated 05 Sep 2016 12:28pm

GATEWAY TAKES OUT ALR TO GET INTO SERVERS

By CBR Staff Writer

It’s obvious that the market for Windows NT-based Pentium Pro multiprocessing servers using is going to be a huge one and Gateway 2000 Inc yesterday made its long-anticipated move into that business, buying Irvine, Texas-based Advanced Logic Research Inc for $15.50 a share, valuing the company at $194m, a slight premium over Thursday’s closing share price of $14.125. Gateway – itself the source of recent takeover speculation – says it will operate ALR as an independent unit and expects there to be no job losses as a result. It will use ALR’s multiprocessing system technology – ALR has managed to bend Intel’s rules and stretch the four-way SHV standard high volume boards to a six-way design – to create a new range of server products. ALR will put Gateway’s products through its channels and use Gateway’s manufacturing, custom assembly and distribution services. At the high-end ALR markets Revolution series servers and counts Unisys Corp and Data General Corp as OEMs. It’s not yet clear what will eventually happen to ALR’s own low-end offerings; its products are priced from under $1,000 and up. ALR has looked ruddier of complexion and altogether much healthier since it stepped out of the volume business; at the beginning of the year the tiny company boasted that it was in third place worldwide in the market for Pentium Pro-based computer systems (CI No 3,077). ALR chairman, chief executive and president Gene Lu will be president of ALR and becomes a VP at Gateway. ALR earned $3.2m on revenue of $55.4m in its last quarter. Gateway will take a one-time, non- cash charge for the write-off of in-process development and research. Gateway earlier this week (CI No 3,184), said its second quarter numbers, while substantially above the prior year wouldn’t meet analysts’ expectations of $0.45 per share.

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