Micron PC and Government Units Sold to Buyout Firm

Gores Technology Group, a private investment firm in Los Angeles, has announced a purchase agreement for the PC manufacturing and government systems units of Micron Electronics Inc. of Nampa, Idaho.

GTG chief executive officer Vance Diggins said Micron's strength in the government market was one of the qualities of that made it an attractive acquisition.

Under the terms of the agreement, GTG will assume the assets and liabilities of Micron Electronics' PC business, including a $70 million cash contribution from Micron. The deal also provides for the possibility for Micron to share in the net proceeds from certain future sales or from the disposal of the business, all or in part, within three years of the closing.

"We are confident that the business has significant potential," Alec Gores, founder and chairman of GTG, said of the MicronPC purchase.

Gores Technology Group is an acquisition and management company that specializes in acquiring high-tech companies. The company owns 35 companies with a total of $2 billion in annual revenue.

Harry Heisler, vice president and general manager of Micron Government Computer Systems, said federal users of Micron hardware would see no change in their contract status and performance.

"We are certainly sticking around," Heisler said. He said he expects GTG management to provide arms-length support to the government and PC units.

Heisler described Micron Electronics as "at best, ambivalent and, at times, downright hostile" to the government market. He said the company "wanted to get out."

The new owners "recognize that their single biggest customer is government, and Micron PC will be a more government-centric business," he said.

The spunoff company will continue to operate from its Idaho facilities.

Micron Electronics is selling the PC business so it can concentrate on its Web-hosting business, HostPro, company officials said. The company is planning acquisitions in the hosting area.

Washington Technology staff writers contributed to this report.

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