Gateway 2000 buys ALR for enterprise nous

Gateway 2000 is to acquire fellow US PC maker ALR in a deal worth $194 million that could pave a way into corporate business.

The companies said ALR will keep its brand and operate as a wholly owned subsidiary. Gateway plans to use ALR's server technology in its forthcoming Enterprise line of servers. The firm, which is struggling to throw off a reputation as a consumer or small business brand, is hoping to build sales into larger firms. The move also gives the direct marketer access to a ready-made reseller channel.

ALR has always had a fine reputation for building fast systems but has struggled in recent years as, ironically, direct sellers like Gateway and Dell have made giant strides. Gateway was recently rumoured to be in merger talks with Compaq.