Invision absorbs Gen Semi IT unit
By: LIBN Staff
Invision.com has acquired the former IT department of General Semiconductor in a deal that will accelerate Invision’s move into corporate services and add 12 new employees.
Under the deal, Invision’s enterprise application development and integration business will absorb the former General Semi IT staffers. That group, in turn, will carry out a multi-year contract to provide a completely outsourced IT department for the remaining General Semiconductor operations in Melville.
Terms of the contract were not released.
In November 2001, Melville-based General Semiconductor merged with Vishay Intertechnology. As part of that merger, Malvern, Pa.-based Vishay plans to ultimately close down the former corporate headquarters of General Semiconductor.
Rather than simply remaining on the Vishay payroll until the IT jobs were eliminated, Bob Lamendola, who served as General Semi’s vice president of IT as well as vice president of IT for Vishay, came up with an alternative. He suggested that his group provide IT services for the remaining 50 employees at General Semi headquarters on a consulting basis. That would allow the group to seek additional work while providing for the needs of Vishay.
The General Semi IT staffers moved into the offices of Invision, which was providing hosting services for the company, early in 2002 in the wake of the merger. By then, headcount had dwindled to 12 from the 19 when the Vishay merger went through.
The move deepened the connection with Invision. Lamendola’s team and Invision management began entertaining the prospect of working together. That step led to the latest agreement.
Tyler Roye, Invision CEO, said the addition hastens the growth of his company’s corporate business.
"This has spiked the growth of our emerging enterprise application development and integration business," he said in a statement.
Lamendola, meanwhile, said the arrangement with Vishay validates the notion that companies can outsource their IT departments.
"This is a living model that it’s possible to outsource the entire IT operations of … any size organization."
Other additions to Invision as part of the General Semi deal are: Nick Mattera, vice president of network operations; Thomas Lamendola, vice president enterprise applications; and Jorge Restrepo, vice president of enterprise integration solutions. Bob Lamendola will now serve as Invision’s executive vice president of enterprise application development and integration.
In recent months, seven-year-old Invision has been seeking a new infusion of venture capital. In 2001, Invision.com closed on $1 million in venture funding from Jericho-based Newlight Management, which brought Newlight’s investment to $2.5 million.
The company offers Internet hosting, Web design and development, storage and backup as well as Internet service provider services. The company also operates LIJobs.com, an Internet staffing service and LongIsland.com, a directory and online community.
Invision, which developed and hosts the Long Island Business News Web site, was founded in 1995 with initial $600 investments from its six co-founders: Chief Executive Officer Tyler Roye, Chief Operating Officer Eric Manno, Chief Financial Officer Mark Manno, Chief Technology Officer Matt Martini and Chief Creative Officer William Egan.
In January, the company received a Deloitte & Touche Fast50 Award as the second fastest growing technology company on Long Island.
Vishay will acquire General Semiconductor After failing twice, the Malvern company reached agreement. It also announced it had sharply lower revenue and earnings.
By Benjamin Y. Lowe, Inquirer Staff Writer
General Semiconductor Inc. finally agreed yesterday to be acquired by rival Vishay Intertechnologies Inc., of Malvern, which will pay $538.9 million in stock and assume $229.4 million in debt for the manufacturer of electronics parts.
Vishay, which typically buys competitors to broaden its product offerings, said the acquisition would add specialized semiconductors to its product line of transistors and diodes for use in automobiles, computers, satellites and other electronics.
Vishay first tried to acquire General Semiconductor, of Melville, N.Y., in 1997, but failed. It failed again in April with an unsolicited $463 million offer.
Felix Zandman, Vishay's chairman and chief executive officer, said in a conference call that the company was likely to pursue additional acquisitions, although it had no specific targets in mind.
There are "many areas we would like to still acquire to get bigger," Zandman said. "Now is the time to acquire companies because times are bad. We intend to continue this direction."
Analysts said the company had an additional $500 million in cash for acquisitions. It completed a $120 million acquisition of the infrared-parts unit of Infineon AG on Tuesday.
General Semiconductor will retain its headquarters in Melville, Robert Freece, a Vishay senior vice president, said. He added that it was still unclear how many layoffs and plant closings would result from the acquisition.
Freece said that while the acquisition was pending, Siliconix Inc., Vishay's semiconductor-manufacturing subsidiary, would continue with its lawsuit against General Semiconductor in which it has alleged patent infringement.
Shareholders of General Semiconductor will be asked to vote on the acquisition, which is also subject to regulatory approval.
Vishay's revenue and earnings, also announced yesterday, fell sharply from results a year ago. The electronics industry in general is going through hard times. Since Jan. 1, Vishay has laid off 4,000 workers, closing plants in Roanoke, Va.; Stamford, Maine; and Tours, France.
Excluding one-time items, Vishay's earnings were $39 million, or 28 cents per share. Wall Street had expected earnings of 23 cents per share, according to Thomson Financial/First Call.
"I think it's a very tough environment for everyone, and I expect it to remain challenging for a time to come," said Eric Gomberg, an analyst with Thomas Weisel Partners in New York. "That said, they have the resources and scale to weather the storm . . . it just may be a lengthy storm."
Vishay said it expected to complete its acquisition of General Semiconductor during the fourth quarter of this year. The combined company would have $3 billion in sales and 24,000 employees worldwide. Vishay also said it expected at least $50 million in annual savings from the combination.
A report issued yesterday by a Merrill Lynch & Co. Inc. analyst, Jerry Labowitz, reiterated the investment bank's short-term neutral rating for Vishay despite the acquisition. He also reduced his estimates of earnings per share by 67 percent to $1.23 for this year and by 20 percent to $1.00 for 2002.
Vishay said revenue for its current quarter would be lower than for the second and "significantly below" totals of a year ago.
Vishay shares closed yesterday at $23.17, down 88 cents. Shares of General Semiconductor closed at $12.82, up $1.56.
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