Datalink Buys Storage Consultant

Datalink has acquired privately held Midrange Computer Solutions

February 2, 2007

3 Min Read
Network Computing logo

MINNEAPOLIS -- Datalink Corporation (Nasdaq:DTLK), a leading independent information storage architect, today announced that it has acquired privately held Midrange Computer Solutions, Inc. (MSCI). Based near Chicago, MCSI is a storage solutions provider with 14 offices across the United States. The acquisition strengthens Datalinks presence in existing markets and expands its reach into a number of key new markets.

“This is an exciting opportunity,” said Charlie Westling, Datalink president and CEO. “The acquisition of MCSI increases our revenue base by approximately one-third and expands the number of enterprise customers we serve. It also extends our market presence throughout the United States, which is one of our key strategies for further growth.”

A leading solutions provider, MCSI provides consulting, storage solutions and services to a large base of U.S. customers in financial services, communications, healthcare and manufacturing. Profitable since its inception, MCSI’s 2006 revenues were approximately $47 million.

Datalink’s purchase price of MCSI is $14 million, consisting of $5 million in cash and $9 million in Datalink common stock. Datalink will record a one-time charge associated with the acquisition in the first quarter of 2007 of approximately $700,000, or $.04 per fully diluted share. Based on its preliminary analysis, the company expects the acquisition to be accretive to 2007 earnings by approximately $.02 to $.04 per fully diluted share, excluding one-time integration charges and amortization of intangibles.

Westling said, “Like Datalink, MCSI management and employees have built a solid track record of delivering high-quality solutions and services and have established a respected and loyal customer base. The completion of this acquisition is great news for our customers, employees, partners and shareholders. We will increase the size of our talented sales and professional services teams, gain entry into new markets, and expand our presence in the Northeast, Midwest, South, and southern California. We look forward to serving this new base of customers.”Lodi Vercelli, MCSI president and CEO, commented, “Becoming part of Datalink is a significant benefit for our customers and employees. During our 11-year history, we have always been proud of the solutions and services we deliver to customers. With the addition of Datalink’s technical skills, its expanded services set and 24x7 customer support center, we can now increase the scope of our customer offering. This will provide us with a number of new revenue opportunities in the near-term and better position the combined company for solid long-term growth.”

MCSI’s operations will be merged with Datalink’s. Datalink expects to accomplish most of the integration work during the first half of 2007. The company anticipates that there will be some overlap in capabilities and the opportunity to realize greater efficiencies. Additionally, Datalink expects to achieve annual cost savings of approximately $1 million to $2 million by mid-2007 through shared synergies. A joint integration team is currently assessing each of these areas.

Westling concluded, “By joining forces with MCSI, we are better positioned than ever to deliver comprehensive storage solutions that drive business efficiencies for our customers and yield a strong return on investment. With this acquisition, we believe we have strengthened our platform for future success.”

Datalink Corp.

Stay informed! Sign up to get expert advice and insight delivered direct to your inbox

You May Also Like

More Insights