Datalink Shareholders Approve The Sale of Company to Insight Enterprises
Datalink shareholders have overwhelmingly approved the sale of the company to Insight Enterprises and $10.5 million in payouts to the company's top executives and its board. The acquisition is expected to close on Jan. 6, according to SEC filings.
The Eden Prairie, Minn.-based solution provider, No. 45 on the CRN Solution Provider 500, reported Thursday in a filing with the U.S. Securities and Exchange Commission that its shareholders backed folding the $771 million data center solution provider into $5.4 billion channel powerhouse Insight Enterprises.
More than 99 percent of shareholders present voted for the $258 million acquisition, with 0.2 percent voting against and 0.8 percent abstaining. Shareholders holding 81.1 percent of Datalink's common stock voted at Thursday's special meeting.
The non-binding vote on a $10.48 million golden parachute for Datalink's five executive officers and six directors was also approved. 70.2 percent of shareholders present voted for the payouts, 26.8 percent of shareholders voted against and 3 percent abstained.
The acquisition is expected to close on Friday, Jan. 6, according to SEC filings. The deal was first announced Nov. 7.
Some $9.75 million of the golden parachute payouts will go to Datalink's executive officers: CEO Paul Lidsky will receive $4.09 million; Chief Operating Officer Shawn O'Grady will get $1.87 million; Chief Financial Officer and Vice President of Administration Greg Barnum will receive $1.76 million; Executive Vice President of Human Resources Patty Hamm will get $1.21 million; and Chief Accounting Officer, Vice President and Corporate Controller Denise Westenfield will receive $812,000.
Barnum and Hamm will exit the business when the deal closes, while Lidsky will be given a $200,000 cash bonus if he serves as a consultant for at least 60 days after the deal closes. Westenfield, meanwhile, will receive a $90,000 cash bonus if he continues her employment through May 31, and a cash severance payment of $90,000 if she is involuntarily terminated without cause following the acquisition.
Only O'Grady is currently slated for a long-role term at Insight, which he'll join as a senior vice president and general manager responsible for Datalink's enterprise data center field business. Following the close of the acquisition, O'Grady will report to Steve Dodenhoff, president of Insight U.S., and retain day-to-day management responsibilities for Datalink's sales, services and support organizations.
Datalink's six non-employee board members will receive a combined $742,000 in equity payouts for their restricted and deferred share holdings. Brent Blackey, a director since 2006 and president and COO of Holiday Companies, will receive $316,000, while James Ousley, former Savvis CEO and 18-year Datalink board veteran, will get $232,000.
The remaining board members will receive just under $49,000 each. These include Greg Meland, board chairman from 2005 to 2013 and former Datalink president and CEO; Patrick O'Halloran, a director since 2006 and CEO of Entiera; Mercedes Walton, a director since 2014 and President and CEO of Ralston Hill Consulting; and James Zucco, a director since 2015 and former Chairman and CEO of Corente.
Insight CEO Ken Lamneck said last month that he was impressed by Datalink's technical and architectural capabilities around the private cloud, which far exceeded Insight's internal capabilities.
As a result of the acquisition, Lamneck said Insight will go from having pockets of architecture-focused engineering talent to having hundreds of people with expertise in that marketplace. Insight has struggled over the years with building storage expertise, Lamneck said, but Datalink already has strong relationships with EMC, NetApp and Pure Storage thanks to its heritage in the storage space.
From a geographic standpoint, Lamneck said Datalink would provide a footprint in North Carolina and South Carolina where Insight wasn't that strong, and augment Insight's existing California operations.