Another spin-off for Black Box

Networking products and services provider Black Box Corp. used to be one of the industry’s major dealmakers. And while it hasn’t abandoned M&A completely — witness its acquisition of $223.6 million voice services provider Norstan, scheduled to be finalized this quarter — the company is turning its attention to spin-offs to continue its growth.

Lawrence, PA-based Black Box in February introduced a 176-page catalog devoted to wireless networking products and installation services. The launch follows an October 2004 mailing of a 260-page computer security products spin-off.

Both spin-offs sell products included in the core catalog as well as new items. Black Box won’t disclose the circulation of the wireless catalog, but its security products book mailed to 100,000 customers and prospects drawn from subscriber files of security magazines and membership lists of security associations.

The company began working on the security catalog in July. “Security is a much hotter topic in the world today, from both a network and a physical perspective,” says director of marketing Julie Lyda. “It made sense given the technology industry we’re in.”

Black Box could use a lift from the spin-offs. Between 2001 and 2003 its revenue declined 22%, from $808.6 million to $525.5 million . And in early February, its stock price slid after an analyst at Robert W. Baird downgraded it to “underperform” following news that the company had received a subpoena from the General Services Administration (GSA). The GSA, which oversees government contracts with civilian vendors, said it was investigating “potential violations of the terms of a GSA Multiple Award Schedule contract.” The government accounts for about 10% of Black Box’s sales.

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