Adaptec's CEO is resigning, and the company is up for sale.
This confirms what many people have thought would happen once Steel Partners' gained control of the board after a proxy battle. Sundi Sundresh, who became Adaptec's CEO in November 2005, then already its president, is leaving on January 4th and will be replaced by interim CEO and president John Quick, who is a managing director for activist investor Steel Partners and an Adaptec board member. Sundaresh has agreed to work as a consultant for Adaptec and assist in the sale process. It looks like an agreed resignation.
Doug Houweling, an independent board member and ex-chair of its Governance and Nominating Committee and a Steel Partners antagonist, has resigned from the board, completing what is effectively a rout of Adaptec's old guard at board and executive level.
Blackstone Advisory Partners has been retained as a financial advisor to assist in the sale of Adaptec, its assets, and operations.
In a piece of Nasdaq bureaucracy Adaptec will schedule its cancelled annual general meeting before the end of March so as to remain compliant with Nasdaq stock exchange rules. Because of that the Nominating Committee will begin a search process for potential directors.
That's the formal stuff over with, let's get on to the nitty gritty. Adaptec is toast. Jared Peters, the newly-appointed world-wide sales VP has been handed a chalice dripping with poison as the board has just sharply increased the doubts customers will have about doing business with a company that's put itself on the block.
The whole sorry Steel Partners saga has fundamentally been about Adaptec's under-performance as a business and its inability to reorganise itself and focus on a viable strategy for the future. The add-value-to-the-adapters strategy is pretty good but it is a pity it took so very long to come about.
Steel Partners came in about a year ago as the kind of investor that scents a weak and failing company with asset values that could be realised. Now, with a recession and maybe-recovery, it has got its stranglehold on Adaptec's assets and has to deliver on its strategy and make a return on its investment. ®