Intel Buys Wind River At $884

Intel Corporation (NASDAQ: INTC) has made what many will consider a strange move by acquiring Wind River Systems Inc. (NASDAQ: WIND). But there is more to this than meets the eye and it will give Intel higher sales with high margins

Intel said today it will buy Wind River Systems, a company that lets wireless carriers and cell phone makers build software that’s embedded into phones, for $884 million.

The move is part of Intel’s effort to establish its lightweight microprocessors such as the Atom chip and underscores that Intel is making a big push into software for managing devices such as smart phones, mobile Internet devices, car entertainment systems and other gadgets for which Wind River helps provide embedded software.

Intel and Wind River are both members of the Open Handset Alliance - one being listed as a semiconductor company and one being listed as a software company. Now they are both the same company - Intel just bought Wind River for $884 Million bucks ($11.50/share).

In the deal, Intel will pay $11.50 a share in cash to buy the company.The deal makes sense on a systems level, but it also brings Intel into a new age of competition with some of its traditional partners, including Microsoft, whose Windows CE operating system directly competes with Alameda, Calif.-based Wind River.

Wind River’s board has approved the deal, which is subject to regulatory approval and is expected to close this summer. Wind River will become part of Intel’s software and services group, headed by Renee James.

Wind River has been around since 1981. It has 1,600 employees and revenues of $359.7 million for the fiscal year ended Jan. 31, 2009. Among its thousands of customers are Alcatel-Lucent, BMW, Boeing, Bombardier Transportation, Mitsubishi, Motorola, NASA, Sony, and Verizon.

The processing giant will acquire Wind River in an all-cash buyout valued at $11.50 per share. This comes to $884 million. There is already some hope here for a higher purchase price.

Embedded systems and mobile devices are essentially new growth avenues for Intel, even if you include a recent announcement of a memorandum of understanding between Intel and Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE: TSM) for systems on a chip.
Wind River has thousands of customers in a wide range of markets and this will allow a deeper push into smart phones, mobile internet devices, consumer electronics, automotive areas, networking equipment, aerospace and defense, energy, and thousands of other devices. Selling processors in a world where a huge portion of them are heading into sub-$500 PCs creates the need for this acquisition.

Wind River's board of directors has unanimously approved the transaction, but the stock has traded at a small premium to the $11.50 price tag. Some may be hoping for a competing bid. Intel is the perfect buyer, but there are several other technology leaders who could potentially make a play for Wind River.

If you think this buyout is from left field, it is not. Jim Cramer touted Wind River as a buyout candidate over a year ago. With this one trading at $11.54 -- above the acquisition price -- and with a 52-week range of $5.61 to $12.99 there is little surprise that some might be expecting a higher price.

“Wind River is a leading software vendor in embedded devices, and will become part of Intel’s strategy to grow its processor and software presence outside the traditional PC and server market segments into embedded systems and mobile handheld devices. Wind River will become a wholly owned subsidiary of Intel and continue with its current business model of supplying leading-edge products and services to its customers worldwide.”

Intel wants a piece of the growing mobile pie and Wind River is their fork. It appears the company will remain branded as Wind River and will merely become a wholly owned subsidiary - but I would fully expect Intel’s name to become much more prominent in the mobile space over the next year or two as the companies build synergies.

Here is the entire press release from Intel and from WindRiver:

Intel to Acquire Wind River Systems for Approximately $884 Million

SANTA CLARA, Calif., June 4, 2009 – Intel Corporation has entered into a definitive agreement to acquire Wind River Systems Inc, under which Intel will acquire all outstanding Wind River common stock for $11.50 per share in cash, or approximately $884 million in the aggregate. Wind River is a leading software vendor in embedded devices, and will become part of Intel’s strategy to grow its processor and software presence outside the traditional PC and server market segments into embedded systems and mobile handheld devices. Wind River will become a wholly owned subsidiary of Intel and continue with its current business model of supplying leading-edge products and services to its customers worldwide.

“This acquisition will bring us complementary, market-leading software assets and an incredibly talented group of people to help us continue to grow our embedded systems and mobile device capabilities,” said Renee James, Intel vice president and general manager of the company’s Software and Services Group. “Wind River has thousands of customers in a wide range of markets, and now both companies will be better positioned to meet growth opportunities in these areas.”

“Our combination of strengths will be of great benefit to Wind River’s existing and future customers,” said Ken Klein, Wind River Chairman, president and CEO. “As a wholly owned subsidiary, Wind River will more tightly align its software expertise to Intel’s platforms to speed the pace of progress and software innovation. We remain committed to continuing to provide leading solutions across multiple hardware architectures and delivering the same world-class support to which our customers have grown accustomed.”

The acquisition will deliver to Intel robust software capabilities in embedded systems and mobile devices, both important growth areas for the company. Embedded systems and mobile devices include smart phones, mobile Internet devices, other consumer electronics (CE) devices, in-car “info-tainment” systems and other automotive areas, networking equipment, aerospace and defense, energy and thousands of other devices. This multi-billion dollar market opportunity is increasingly becoming connected and more intelligent, requiring supporting applications and services as well as full Internet functionality.

The board of directors of Wind River has unanimously approved the transaction. It is expected to close this summer, subject to certain regulatory approvals and other conditions specified in the definitive agreement. Upon completion of the acquisition, Wind River will report into Intel’s Software and Services Group, headed by Renee James.

Wind River – A Leader in Embedded Software
As an Intel subsidiary, Wind River will continue to develop innovative, commercial-grade software platforms that support multiple hardware architectures that are optimized for the needs of its many embedded and mobile customers. The acquisition will boost Wind River’s Intel-architecture focused sales as it gains access to the company’s technology investments, brand, employees and global sales force.

Founded in 1981, Wind River is a publicly held company with headquarters in Alameda, Calif., with more than 1,600 employees and operations in more than 15 countries. During its fiscal year ended Jan. 31, 2009, Wind River reported annual revenues of $359.7 million.



Wind River develops operating systems, middleware (software found between an OS and software application), and software design tools for a variety of embedded computing systems. Its main products include VxWorks, the market-leading proprietary and multicore-ready real-time operating system, and commercial-grade Linux software platforms. The company also provides design services and software expertise, including custom-built solutions, development tools and device testing products.

With thousands of customers, Wind River technology is relied upon by most major computer and networking communications companies, and used by corporations and government agencies such as Alcatel-Lucent, BMW, Boeing, Bombardier Transportation, Mitsubishi, Motorola, NASA, Sony, Verizon and many more.

Intel is acquiring Wind River under terms an agreement under which Intel will acquire all outstanding Wind River common stock for $11.50 per share in cash, or about $884 million in the aggregate.

Depending on how military and embedded systems designers perceive the deal, Intel's acquisition of Wind River may create a market opportunity for real-time software providers who compete directly with Wind River, such as Green Hills Software in Santa Barbara, Calif., and Sysgo AG in Klein-Winternheim, Germany.

At the same time, however, Wind River competitors in real time operating system software now must compete with the marketing might that Intel brings to the table.

Among the reasons for the acquisition is to enable Intel to compete more directly with Microsoft for military embedded systems, as well as embedded applications, experts say. Intel already offers a version Linux called Moblin.

With the Wind River acquisition, Intel also gains powerful real-time Linux expertise in Wind River's RT Linux product, which Wind River acquired in 2007 from Finite State Machine Labs Inc., (FSMLabs) in Socorro, N.M.

"This acquisition will bring us complementary, market-leading software assets and an incredibly talented group of people to help us continue to grow our embedded systems and mobile device capabilities," says Renee James, Intel vice president and general manager of the company's Software and Services Group.

"As a wholly owned subsidiary, Wind River will more tightly align its software expertise to Intel's platforms to speed the pace of progress and software innovation," says Ken Klein, Wind River chairman, president, and chief executive officer.

"We remain committed to continuing to provide leading solutions across several hardware architectures and delivering the same world-class support to which our customers have grown accustomed," Klein says.

The acquisition will deliver to Intel software capabilities in embedded systems and mobile devices such as aerospace and defense, energy, smart phones, mobile Internet devices, and automotive information and entertainment systems.

The board of directors of Wind River has unanimously approved the transaction, and the deal is expected to close this summer, after which Wind River will report into Intel's Software and Services Group.

Wind River is also a member of the Open handset Alliance, and has a commercial software solution based on Google’s Android that runs on Qualcomm’s Snapdragon chipsets.

Intel’s Atom-based automotive infotainment reference design is based on the new Genivi Alliance specification. It runs Wind River Linux. In March, the two companies signed a major deal on supporting multi-core designs in aerospace and defense, network infrastructure, industrial, medical, and print imaging market segments, spanning Wind River’s Linux and VxWorks platforms.

The acquisition will boost Wind River’s Intel-architecture focused sales, says Intel. It is unclear, however, the extent to which the new subsidiary might support development on other platforms where Wind River has long-standing relationships with semiconductor companies including ARM, Texas Instruments and Freescale. Wind River has about 1,600 employees and annual sales of $359.7 million.

Embedded systems are dedicated to specific tasks, so design engineers can optimize it, reducing the size and cost of the product, or increasing the reliability and performance.

Britney Spears' Sons Dance to Toxic (Part 2) from Britney Spears on Vimeo.

Britney Spears' Sons Dance to Toxic (Part 1) from Britney Spears on Vimeo.

Angelina Jolie: World's Most Powerful Lady

The Forbes list of 100 celebrities was released today, and Angelina Jolie is number one, and supposedly that means something.

Hollywood`s most powerful celebrity actress Anjelina Jolie celebrates her 34th birthday has it all money fame, family and of course Brad Pitt if you ignore the unlikely breakup rumors. Now she can add most powerful celebrity in the world to the list as she has topped Forbes magazine’s Celebrity 100 list for the first time, as she has dethroned talk show queen Oprah Winfrey, who slipped to second place after two consecutive years at the top.

Obama has got in touch......................

Normally that would get me accused of “smearing” Barack Obama. During the election, as ABC’s Jack Tapper points out, the Obama campaign was branding anyone suggesting that Obama had a Muslim background as a lying liar. But this time it’s ok given that the person saying it is the White House National Security Adviser.

When people fabricate stories about someone’s faith to denigrate them politically, that’s an attack on people of all faiths.

During the 2008 Campaign Barack Obama's website claimed that Obama's father was an agnostic or atheist.

Carlos Araya

Carlos Araya used to order lobster, filet mignon and $200 bottles of red wine at the Palm Restaurant in midtown Manhattan.

Now, he seats customers at its Tribeca branch.

Mr. Araya, 38 years old, lost his job in 2007 as a crude oil trader on the New York Mercantile Exchange. After visiting dozens of headhunters with no luck, he applied in August 2008 to be a host at the Palm to support his wife, two young daughters and mortgage payments. His salary has plunged from $200,000 to $25,000.

$25K is damned good, even if it is only a third of what it takes to support Aravosis in the style to which he's become accustomed.

"It was a hard reality at first," he says. "I used to see unemployed people and think they were lazy, that it was all on them. Now it's happened to me."

Empathy! So I can't work up a real populist rage against the guy, now that he's had to jioin the proles and get a real job -- especially since Araya was a trader, and not one of the worst of the worst in some bucket shop like Goldman Sachs.

Still, you can't help but wonder why there's no focus at all on the thousands of people all over the country who've been undergoing the same losses -- for years.

On a recent holiday in my beloved Manhattan, a taxi ride brought me instant inspiration.

I flagged a cab on Houston on the eastside, got in, and tacked to the back of the seat in front of me was a professional resume announcing the job search intentions of recent LaSalle MBA graduate James A. Williamson III.

I asked, "Is this your resume?"

"Yes, ma'am," came the polite reply.

Thus began a delightful conversation. James A. Williamson III is a dedicated young man. He went right from undergraduate school into his MBA program, and moved to New York City to land a job in marketing in the City that never sleeps.

"Why are you driving a cab?"

"I haven't been able to get a job." He's been looking diligently since before he graduated.

"James," I asked, "do you have a copy of your resume?"

"Yes, ma'am." He handed it over. His objective is clearly stated at the top.

"To begin a career path with a stable corporation that will allow me to utilize both my technical and analytical skills to develop integrated strategies for maximizing company profits and expanding existing customer sales."

I gave this enterprising young man my card and asked him if his mama was a woman of faith. She is. I told him to tell her I'd be praying with her for his job search for 30 days, and I took his resume and showed it to everyone I met that day.

When I got home to Boston, there was a polite email from James thanking me for my wisdom and encouragement. He also sent me a URL for a CNN feature interview with him by John Roberts: Watch it -- he's a gem.

James has worked for Michelin and for General Motors. He's a Big Brother and member of multiple honor societies.

When asked what to do to survive until the economy improves, Suze Orman responded, "This is the time when you take your ego and put it aside." That's just what James has done.

He's driving a cab to earn money, and learn more about the city that he so wants to call home, just doing what he has to do to live, and it's time for him to do more than live. It's time for him to thrive.

So here's a shout-out to anyone who has a marketing department in Manhattan. You're missing a great asset: James A. Williamson III. He's waiting to hear from you.

Mr. Araya, 38 years old, lost his job in 2007 as a crude oil trader on the New York Mercantile Exchange. After visiting dozens of headhunters with no luck, he applied in August 2008 to be a host at the Palm to support his wife, two young daughters and mortgage payments. His salary has plunged from $200,000 to $25,000.

If the financial crisis was the flood, then the Arayas are one of the families standing in the stagnant waters left behind. Some former Wall Street employees, highly trained and accustomed to comfortable salaries, are having trouble translating their specialized skills to other fields that pay well, and instead find themselves forced to accept low-wage work. Now, Mr. Araya is on the brink of losing it all and is doubtful that he will ever return to Wall Street.

And he isn't alone. Nearly 25,000 jobs have been lost in New York City's financial sector since August 2007, according to the New York State Department of Labor. The finance industry in New York is expected to lose 56,800 jobs from the end of 2007 to the beginning of 2012, according to projections from the Independent Budget Office, a publicly funded information agency.

John Carbonaro was let go as a floor clerk by Bank of America in January 2009, and despite his job-hunting efforts, remains a "Mr. Mom." Joe Morrone, a laid-off trading clerk from Prudential, has been unemployed for two years and struggles to support his daughters and grandson. He has had stints as a deli worker, a doorman and a bouncer. "I used to have three cars," Mr. Morrone says. "Now I share one."

The result is an unlikely stream of erstwhile Wall Street pros need help.

"I've got 'em all -- Lehman, AIG, Citi," says Bob Townley, head of Manhattan Youth in Tribeca, an organization that gave the Arayas financial assistance to pay for childcare while they are working. "I can hear it in a parent's voice when there's trouble. Others are too proud to ask for help."

Many of these parents once made donations to Mr. Townley's program. Now they are asking for aid to pay for their kids. Mr. Araya's daughters, ages 6 and 7, are in an after-school program at Mr. Townley's center.

Nowadays, during Mr. Araya's late nights at the Palm, reminders of his old life crop up when former colleagues come in. Some are encouraging and offer hugs. Others sneer, he says. "The way they look at you, you know they're thinking negatively," he says. Some are laid-off like him, and ask if the restaurant is hiring.

As a host, Mr. Araya wears a suit and tie. He's on his feet most of the day, either escorting guests to tables or manning the podium at the front, answering phone calls, managing reservations on the computer and fielding orders from wait staff and managers.

Although he's thankful for the work at the Palm, paydays can be bittersweet. "At the end of the week, I get my paycheck," he says, "and I think, 'I used to make this much in a day.' "

Mr. Araya's wife, Dennise, has gone back to work as an administrative assistant for a construction company and leaves home at 6 a.m. Mr. Araya often works until one or two in the morning and on weekends, leaving little time for the family to be together. He calls his daughters every night during his break at the restaurant on his cellphone to say good night.

Mr. Araya now is the one who gets his children ready for school. He's learned to tie pony tails, inadvertently shrunk sweaters in the wash and knows which grocery store has the best price on milk.



The Arayas stopped dining out, pulled their daughters out of ballet and tumbling classes, and dropped cable television -- even though the flat screen he bought when they first moved in still sits in the living room.

Last month, for the first time, the Arayas didn't make a mortgage payment. Their savings are almost depleted. The mortgage, taxes and fees for the family's condo cost $6,200. Combined, he and Denise bring in $4,000 a month. Three months ago, he and his wife applied to restructure their mortgage. The bank told them it is still processing the request. They fear foreclosure and bankruptcy.

Recently, their oldest daughter asked Mr. Araya if the family would have to move. He told her he didn't know. She countered: "How much money do we need?"

"The way she looked at me," Mr. Araya says, "I could tell she was counting the money in her piggy bank." He went into the bathroom and cried. After a few minutes, he dried his eyes and walked back into the living room.

Mr. Araya, the son of a cab driver, grew up in a working-class neighborhood in nearby Queens. Like thousands of New Yorkers, he used a Wall Street job to vault into a comfortable lifestyle that included his apartment -- bought for $960,000 four years ago -- in Manhattan's Battery Park City neighborhood and family vacations to Cabo San Lucas, Disneyland and Las Vegas.

The Arayas purchased the condo in 2005 with a 20% down payment and a pre-construction price. The proximity of the two-bedroom, two-bathroom apartment to the trading pit allowed Mr. Araya to spend more time with his family and less time commuting. Ms. Araya diligently managed the family budget with Excel charts to ensure that they had no credit card debt, good credit histories even an emergency fund saved over five years that is now depleted. Mr. Araya says he would be lucky to find a buyer and break even on the apartment now.

Mr. Araya dropped out of college in 1992 to work in the pits, where he quickly advanced from runner to trader. He shifted between large firms like J.P. Morgan Chase & Co. and smaller shops like Aren Brokerage Service, the firm that eventually laid him off.

A wrestler in high school, Mr. Araya was known for elbowing his way through the loud commodities pits. Nights were late; mornings began at 4:30 am, fueled by coffee.

"You'd clock in and just try to kill each other till the bell rang," Mr. Araya says.

He had a knack for the Merc job. He could gauge from the roar of traders' voices how the market was faring. He gained loyal clients, and was confident enough to engage in profane shouting matches with them on the phone. Mr. Araya still has dreams about the hand signals traders use to indicate orders. His trading jacket hangs in his closet.

Every day lately, he spends two hours online, trolling job Web sites like Monster.com and e-mailing former colleagues. The leads have dried up, since some of them are laid off themselves. He's contacted headhunters, been on a dozen interviews in the last year and a half, but nothing has come of them.

"It was a hard reality at first," he says. "I used to see unemployed people and think they were lazy, that it was all on them. Now it's happened to me."