Global PC distributor Micron Electronics is leaving the PC business and will transform itself into a web hosting company.
Micron has agreed a deal to buy US hosting firm Interland for $130m in stock, and will combine it with subsidiary Hostpro. The new company will be rebranded under the Interland name.
The company also announced plans to sell its SpaceTek microprocessor recycling unit for $42m to parent company Micron Technology (MT). MT, which has 3200 employees worldwide, owns a majority stake in Micron Electronics.
Joel Kocher, Micron Electronics' chief executive, said the company was forced into its decision by continued margin pressures.
"With the drastic downturn in the economy and the PC industry, we have decided to focus our resources exclusively on growth opportunities in the hosting business. Hosting will serve as the foundation for many opportunities as small to medium sized enterprises increasingly outsource IT," he said.
Some 400 staff, about 20 per cent of the workforce, will be made redundant following the sale of the PC operation.
Also published in Computer Reseller News
Fall in shipments through distribution in first six weeks of Q4 are an indicator that Black Friday could be a damp squib, according to analyst Context
CEO Justin Harling and COO Richard Behan buy out other shareholders
UK chief executive Cindy Rose says the proposed deal is needed to maintain the 'free flow' of data
Contingency plans follow Carillion's demise earlier this year