MPC Computers finds a new home
- By Nick Wakeman
- May 06, 2005
By midsummer, MPC Computers LLC will enter the next leg of what has been
a most interesting journey for the
, computer maker.
When Gores Technology Group rescued
MPC from Micron Electronics Inc. in 2001, the conventional wisdom was that the
private investment firm, which specializes in nursing technology companies back
to health, would turn a quick profit by selling MPC to another PC maker.
Instead, MPC began to turn a profit
and thrive. On this year's Top 100, MPC scored its highest ranking ever ?
No. 39, with $266.4 million in prime contracting revenue.
Although he declined to disclose
overall revenue, MPC President and Chief Executive Officer Michael Adkins said
the company has grown for four straight years.
And now, Gores is preparing to do what
the prognosticators said it would: sell MPC.
Gores has brokered a sale of MPC to
HyperSpace Communications Inc. of
. The value of the all-stock deal has not been disclosed, but the sale is
expected to close in late June or early July.
With the sale, MPC moves from being
owned by what Adkins called a financial buyer to being owned by a strategic
buyer. The difference is more than semantic.
"Under financial ownership, their
expectations and how they make investments is different than under strategic
ownership," he said. "Where management wants to take the business requires
investment and requires that the money generated by the business be invested
back into the business."
Gores leaders understood this, Adkins
said, and believed in what HyperSpace, which just went public in October 2004,
and MPC can do together. HyperSpace stock is the only consideration in the deal,
"The upside is greater for [Gores]
than if they had maintained ownership of us," he said.
Being part of HyperSpace, a 15-person
software company, means that MPC will be part of a publicly traded company,
which brings the advantage of more flexibility when making acquisitions or
financing other initiatives, he said.
At least one nagging question from
customers and business partners will go away, too. "When you're a private
company, there is a question that always comes up: What is the exit strategy?"
One thing that won't go away is the
competitive landscape MPC plays in and the challenges it faces.
"We don't pretend to be or expect
to be the biggest competitor in the space," he said. "But we've carved out
a nice niche for ourselves."
One thing MPC attempts to do is stay
clear of competitions where price is the deciding factor. With bigger
competitors such as Dell Inc. (No. 8) and Hewlett-Packard Co. (No. 35), MPC is
at a disadvantage.
"We're looking for relationships
where price is an important consideration, but that the total cost of ownership
also is being considered and looked at," he said. "There are times when
price is the only consideration, and there are companies out there bigger than
us that have deeper pockets, In those situations, we tend not to play."
Where MPC has tried to stand apart is
in providing IT services and superior customer service, Adkins said. While the
company talks about the speed of its computers, it also brags about the speed
with which it responds to customers, he said.
The company tries to measure nearly
every interaction with customers, from how quickly its call-center personnel
answer the phone to how often the company fixes problems the first time they
occur, he said. Service calls are followed up with a survey to evaluate how well
"We set the bar very high for
ourselves, and we make that information available to our customers," he said.
The result has been loyal customers
and a government business that accounts for 55 percent of revenue, Adkins said.
Nick Wakeman is the editor-in-chief of Washington Technology. Follow him on Twitter: @nick_wakeman.