Quantum buys ADIC18 May 2006
Storage specialist, Quantum Corp, has announced a definitive agreement to acquire Advanced Digital Information Corp for approximately $770 million.
With combined revenues exceeding $1.2 billion over the last four quarters, the two companies say they are joining to provide customers with the most comprehensive and integrated range of solutions for securely storing, managing, protecting and recovering their data in open systems IT environments. Bringing the two companies together will enable Quantum to deliver greater innovation, value and support to end users, channel partners and OEMs. In addition, the combination will strengthen Quantum’s financial position, expand its market access and increase its opportunities for growth.
"We are very excited about bringing Quantum and ADIC together to create what will clearly be the largest independent provider of backup, recovery and archive solutions and a global leader in addressing customers’ evolving data protection challenges," said Rick Belluzzo, chairman and CEO of Quantum, who will hold the same position in the combined company. "With an unparalleled portfolio of systems, software, devices and media, we will be able to integrate these assets and incorporate value-add features to offer best-of-breed solutions for customers of all sizes. Our enhanced financial strength will also enable us to increase our investments in new products and services both within and beyond our core business."
The financial small print states that the transaction is expected to be up to 15 cents accretive to Quantum on a cash earnings per share basis, with annual cost synergies of approximately $45 million in the first full year of combined operations. The company expects that this accretion should start to be reflected in its financial results within the second full quarter following the close of the transaction. Based on the complementary nature of the two companies’ businesses, savings are expected to come primarily from economies of scale and manufacturing efficiencies in cost of goods sold, reduction of duplicative operating expenses and sharing of R&D and marketing costs. Given Quantum’s previous success in integrating Benchmark and Certance after those acquisitions, the company expects a ‘smooth and expeditious’ integration of ADIC.
"Joining with Quantum will deliver tremendous value to both our shareholders and customers," said Peter van Oppen, chairman and CEO of ADIC. "The combined company will provide a single source of intelligent and innovative backup, recovery and archive solutions that enable end users to reduce costs and more easily protect and manage their business-critical data. The combination will also create a stronger go-to-market infrastructure, with larger and better leveraged sales and service capabilities through which we can offer greater support to customers."