Utah Venture Capital Group Acquires Intel’s Software Division in Riverton

A Utah venture capital group has partnered with a San Francisco investment firm to acquire most of Intel Corp.’s software products and services division based in Riverton.
LANDesk Acquisition Corp., a company created by Vector Capital and Salt Lake City-based vSpring Capital, has agreed to buy most of the division and the LANDesk-branded products made by the unit.

BY SHERRI C. GOODMAN
THE SALT LAKE TRIBUNE

While exact terms of the deal were not released, Intel spokesman Jason Bagley said it includes an undisclosed amount of stock in the new company.
"Intel wants to see this thing be successful. That’s why we’re retaining an equity position," Bagley said Wednesday.
Intel employs about 550 people in Riverton, including about 100 in the software products division. Most of the others work in employee services such as payroll, expense reimbursements and relocation assistance for the company’s U.S. workers.
The new Salt Lake City-based business is expected to make job offers to all of the software unit’s 100 Utah employees as well as 50 working in other locations.
The company also plans to hire additional employees to handle accounting and support duties as it expands, said Alex Slusky, managing partner for Vector Capital, the lead investor in the new company.
[The division] "has a deep technology base, it has a tremendously talented team, and a very strong group of customers and distribution partners — all the ingredients for success that we look for," Slusky said.
Joe Wang, who was vice president of Symantec Corp.’s enterprise administration division, is chief executive of the new company. John Sutherland, who managed the software products business for Intel, is vice president of operations.
For vSpring managing partner Ed Ekstrom, investment in the unit represents a resumption of interest in products he shepherded for years.
Ekstrom joined Intel in 1991 when the semiconductor giant acquired part of LANSystems Inc., a networking software company in which he was a principal.
In 2000, Ekstrom, three other entrepreneurs and a longtime venture capitalist started vSpring, focusing its investments on high-tech and biotech startups in the Intermountain West.
VSpring has so far invested in 12 companies, including LANDesk Acquisition.
"The most relevant thing about this deal is instead of this business going away it becomes part of the local economy and grows on its own merit. It was a profitable business, and unfettered, I think it will flourish," Ekstrom said.
For Intel, selling the division is part of its strategic decision to "stay focused on what Intel does best — silicon products," Bagley said.
Intel has been closing divisions that made consumer products and managed Internet sites so it can focus on the chip business.
Meanwhile, Intel needs to work harder to stave off fresh competition in the semiconductor business from Advanced Micro Devices Inc., investors said.
"If you’re the dominant company in your business, then you really need to concentrate on staying there," said Jim Luke, whose BB&T Asset Management owns Intel shares and manages $10 billion. "Advanced Micro has jumped up and taken some market share in the low end."
Intel shares rose 25 cents to $16.11 on Wednesday. They have lost about half of their value this year.
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