Quantum leaps into LTO
By Shane O'Neill, Senior News Writer
21 Oct 2004
If you can't compete with
LTO, buy it. That's what
Quantum Corp. did yesterday when it announced it has agreed to acquire
LTO tape company
Certance for $60 million
in cash. With the acquisition, Quantum will plug a hole in its portfolio with
the fastest growing tape technology on the market.
Certance, Quantum adds
tape technology -- along with lower-end tape formats
Travan -- to its existing
DLT tape drives.
Additionally, the acquisition will give Quantum a
DAT-72 autoloader and a
disk-to-disk-to-tape (D2D2T) appliance for small and medium-sized businesses (SMBs),
both of which
released over the past year.
Rick Belluzzo, chairman and CEO of Quantum,
said the two companies are now combined as a $1 billion company and will build
on each other's strengths. "We will offer the industry's broadest portfolio of
tape and disk systems for backup, recovery and archive," he said.
Randy Kerns, senior partner, The Evaluator
Group, Greenwood Village, Colo. points to the addition of
LTO technology as the
real boon for Quantum. "This is really a big deal," said Kerns. "It allows
Quantum to diversity its tape portfolio and get into the fast-growing
LTO market. This will
make Quantum a much stronger company."
LTO tape library revenue
SDLT by more
than a 3-to-1 margin in 2003 according to Bob Abraham, president of Ojai,
Calif.-based analyst firm Freeman Reports. He predicted that users and OEMs will
benefit from the merging of the two companies. "This is a superb move because
the two companies have historically been strongest in different parts of the
market -- Certance in the entry-level and Quantum in the midrange," said
Abraham. "This combination will benefit users and address the desire of OEMs and
tape automation providers to streamline supply chain management."
Quantum's acquisition of Certance is one of a
few actions the company has made in the past year. Last fall it introduced three
SDLT 600 tape
drive, PX720 tape library and DX100 disk-based backup system.
Under the terms of the agreement Quantum will
acquire all of Certance for $60 million in cash and integrate the company into
Quantum. This purchase price excludes the distribution to the sellers of up to
$34 million cash from
Certance's balance sheet. The acquisition is expected to close within the
fourth calendar quarter of 2004.