Quantum has set its heart on cracking the enterprise market and is coughing up $770m to buy rival storage vendor Advanced Digital Information Corp.
Quantum is banking on the deal to massively expands its sales force and channel operation, particularly in the enterprise market where ADIC typically plays. Quantum said it would be building on ADIC’s StorNext datamanagement software. The buyer also reckons combining the two firm’s technology will allow it to rack up its investment in high growth areas.
If Quantum’s numbers are right, the deal should deliver savings of $45m in its first year of combined operations, and add up to 15 cents per share to earnings. That should put a smile on Quantum chairman and CEO Rick Belluzzo’s face – and Belluzzo will be doing the same job at the combined company.
Belluzzo’s company could do with something to smile about. The deal was announced the same day Quantum reported fourth quarter sales were down 14 per cent to $206m with losses of $23m.®