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Datalink Acquires Storage Solutions Provider MCSI

Mergers / Acquisitions
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Datalink Corporation, a leading independent information storage architect, today announced that it has acquired privately held Midrange Computer Solutions, Inc. (MCSI). Based near Chicago, MCSI is a storage solutions provider with 14 offices across the United States. The acquisition strengthens DatalinkÆs presence in existing markets and expands its reach into a number of key new markets.

ôThis is an exciting opportunity,ö said Charlie Westling, Datalink president and CEO. ôThe acquisition of MCSI increases our revenue base by approximately one-third and expands the number of enterprise customers we serve. It also extends our market presence throughout the United States, which is one of our key strategies for further growth.ö

A leading solutions provider, MCSI provides consulting, storage solutions and services to a large base of U.S. customers in financial services, communications, healthcare and manufacturing. Profitable since its inception, MCSIÆs 2006 revenues were approximately $47 million.

DatalinkÆs purchase price of MCSI is $14 million, consisting of $5 million in cash and $9 million in Datalink common stock. Datalink will record a one-time charge associated with the acquisition in the first quarter of 2007 of approximately $700,000, or $.04 per fully diluted share. Based on its preliminary analysis, the company expects the acquisition to be accretive to 2007 earnings by approximately $.02 to $.04 per fully diluted share, excluding one-time integration charges and amortization of intangibles.

Westling said, ôLike Datalink, MCSI management and employees have built a solid track record of delivering high-quality solutions and services and have established a respected and loyal customer base. The completion of this acquisition is great news for our customers, employees, partners and shareholders. We will increase the size of our talented sales and professional services teams, gain entry into new markets, and expand our presence in the Northeast, Midwest, South, and southern California. We look forward to serving this new base of customers.ö

Lodi Vercelli, MCSI president and CEO, commented, ôBecoming part of Datalink is a significant benefit for our customers and employees. During our 11-year history, we have always been proud of the solutions and services we deliver to customers. With the addition of DatalinkÆs technical skills, its expanded services set and 24x7 customer support center, we can now increase the scope of our customer offering. This will provide us with a number of new revenue opportunities in the near-term and better position the combined company for solid long-term growth.ö

MCSIÆs operations will be merged with DatalinkÆs. Datalink expects to accomplish most of the integration work during the first half of 2007. The company anticipates that there will be some overlap in capabilities and the opportunity to realize greater efficiencies. Additionally, Datalink expects to achieve annual cost savings of approximately $1 million to $2 million by mid-2007 through shared synergies. A joint integration team is currently assessing each of these areas.

Westling concluded, ôBy joining forces with MCSI, we are better positioned than ever to deliver comprehensive storage solutions that drive business efficiencies for our customers and yield a strong return on investment. With this acquisition, we believe we have strengthened our platform for future success.ö

About MCSI
Midrange Computer Solutions, Inc. (MCSI) is a privately held company specializing in data storage protection and accessibility management. In business since 1995, MCSI is a leader in the field of Storage Area Networks (SANs) and has implemented solutions for many Fortune 500 companies. MCSI is headquartered in west-suburban Chicago and has sales and support offices across the country.

About Datalink
Datalink Corporation is an information storage architect. The company analyzes, designs, implements and supports information storage infrastructures that store, protect and provide continuous access to information. Datalink's specialized capabilities and solutions span storage area networks, network-attached storage, direct-attached storage and IP-based storage, using industry-leading hardware, software and technical services.

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