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Compaq buys Inacom's PC operations

So much for channel assembly

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Compaq has stepped up its direct business by paying $370 million cash for Inacom’s PC assembly facilities. The deal, predicted here last month, will see the US distributor hand over its four US assembly and distribution operations and 2,500 staff, as well as its systems for managing customer orders online. The agreement is expected to be finalised by March 31. Big Q plans to spin the acquired assets off into a separately managed, wholly owned subsidiary led by Mike Winkler, senior vice president and group general manager of Compaq’s commercial personal computing group. The deal will allow the Houston-based vendor to directly provide US users with tailor-made PCs and track their purchases, Compaq said. "This purchase makes great strategic sense for Compaq because it gives us the right capabilities quickly and cost-effectively," said Michael Capellas, Compaq president and CEO. "We’ll be better equipped to meet the diverse and changing needs of our US customers – particularly our major accounts which clearly want to go direct – increasing our potential for profitable growth." But analysts claimed the deal would not be enought to plug the growing gap between Compaq and direct demon Dell. While boosting Compaq’s manufacturing capabilities, it would still not give it Dell’s direct relationship with its customers, they claimed. "It doesn’t get Compaq closer or further from a customer," Raymond James & Associates analyst Robert Anastasi told today’s Wall Street Journal. The four acquired facilities are based in Indianapolis; Omaha, Nebraska; Swedesboro, New Jersey; and Ontario, California. Inacom will still deal with its own on customers, but will buy PCs from Compaq instead of customising them itself. In November, Compaq admitted its supply chain needed speeding up and ditched its channel-only policy for volume sales in the UKRelated stories Dell eats into Compaq’s European sales Compaq offers crumbs of comfort with small Q3 profit

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