“The people at Vector Capital are the most impressive team I have worked with. They are knowledgeable, aggressive, practical, and hard-working. The buyout of the LANDesk division from Intel was very complicated. Vector Capital was able to make it happen”
Provides industry-leading desktop and security management software solutions
About
Headquartered in Salt Lake City, Utah, LANDesk software solutions maximize user productivity while reducing the associated IT complexities, risks, and costs to the business. Its products focus on systems management, security management, and asset lifecycle management for IT devices, servers, and networks.
Insight & Approach
LANDesk faced multiple challenges as an “orphaned” division of Intel in 2002. Despite being a technology leader in a growing market, LANDesk’s sales and marketing efforts were severely restricted. Competitors were gaining ground. During a period when Intel was refocusing on its core businesses, LANDesk simply was not receiving the attention or resources required to reach its potential.
In 2002, during some of the most difficult times in the software industry, Vector had the vision to recognize LANDesk’s true business potential by leading its spin out from Intel. By heavily increasing investment in R&D and sales and marketing, LANDesk as a private company would have the ability to overtake its competitors. Although other prospective buyers were deterred by the Seller’s proposed terms of the divestiture, Vector saw the potential for compromise.
Instead of demanding “customary” terms, Vector spent months negotiating a highly-customized structure that balanced the needs of all parties. The final transaction featured a novel IP licensing arrangement, an earn-out mechanism and the incentive-aligning retention by Intel of a significant equity stake. Vector also partnered with Joe Wang (then a senior executive at Symantec) to lead the new executive team and reinvigorate the company.
Vector Value Add
LANDesk has taken advantage of many opportunities as an independent Company. Free from the constraints imposed by of its former parent, sales and marketing have been rebuilt to better leverage an indirect sales channel in addition to increasing focus on larger strategic accounts. Through increased investment in R&D (including an aggressive Chinese offshoring program), LANDesk out-innovated the competition and broadened its products to reach new growth markets.
Results
In four years, the company’s revenues had more than tripled and it was widely recognized as a leader in the growing desktop management space. In 2006, LANDesk was sold to Avocent Corporation (NASDAQ:AVCT) for a total consideration of $416 million.