Inside the Voodoo-HP Deal

If you’re a serious gamer, Voodoo Computers is the PC industry’s Rolls-Royce with cool-looking and powerful systems (albeit at a premium price). Earlier this week, the Calgary-based company said it had agreed to be acquired by Hewlett-Packard for undisclosed amount. So why rush into the arms of HP rather than raising venture capital or doing an IPO? Well, this story goes back to January 2005 when Voodoo came to a strategic fork in the road. As it strived to stay on the bleeding-edge, it ran into size and scale issues because innovation is challenging when you have limited sales volume. Ravi Sood, who owns Voodoo with his brother, Rahul, said discussions with HP started to take place but things were moving at a snail’s pace until Mark Hurd took over as CEO. Hurd recognized the value of Voodoo’s brand and how it could fit into HP’s gaming strategy and leverage its $3.5-billion of R&D. The deal, however, took on some complexity when Dell, which approached Voodoo about a potential acquisition. Ravi Sood said Dell’s advances were rejected because Voodoo didn’t see any synergy between the two companies. Meanwhile, HP started to look more attractive because it respected the Voodoo brand and it wanted to keep Voodoo in the high-end of the market. ”This deal isn’t about one plus one,” Sood explains. ”We weren’t motivated to take a check and run the business at status quo. The difference here is HP has applied a veil of autonomy on the Voodoo brand and will integrate their technology.” For more check out, CNet and Real Tech News.