While the Hewlett-Packard (NYSE: HPQ) scandal is a huge distraction – as the company's CEO had to testify before Congress yesterday – the company is still able to do deals. The latest is the purchase of VoodooPC.
Voodoo was founded in 1991 and is a fairly small company (with about 30 employees). The company is a boutique gaming PC manufacturer. Interestingly enough, Dell Inc (NASDAQ: DELL) made a similar acquisition recently; that is, the purchase of Alienware.
With laser-thin margins in the PC world, companies like HP and Dell need to find ways to get premium pricing. And, as gaming surges in popularity, there will certainly be demand for sleek computers. These computers can easily range from $5,000 to even $10,000.
Also, HP will maintain the VoodooPC brand (which, by the way, is a cool name and has lots of brand equity in the gaming world). Over time, we might see some of the coolness filter into mainstream HP PCs.
Interestingly enough, VoodooPC's co-founder, Rahul Sood, wrote about the deal in his blog. Yes, Hurd was definitely involved. According to the latest blog post: "All it took was one email to Mr. Hurd with a short explanation of our strategy and all of the sudden the sea was parted and we had people contacting us. It was clear that Mark Hurd doesn't mess around."
Tom Taulli is the author of various books, including the Complete M&A Handbook and operates InvestorOffering.com.
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