Quantum Completes Acquisition Of Advanced Digital Information Corporation
Quantum Completes Acquisition Of Advanced Digital Information Corporation
August 24th, 2006: "Leading global storage company specialising in backup, recovery and archive solutions", claims for finalised deal.
Quantum has announced the completion of its acquisition of Advanced Digital Information Corporation (ADIC). Under the terms of the definitive agreement announced on May 2, 2006, and following approval of the transaction by ADIC shareholders last Friday, Quantum acquired all of ADIC and its outstanding shares for approximately US$770 million, primarily in cash.
Quantum is funding the transaction through a combination of cash on hand and approximately US$500 million in financing from a group of banks and other lending institutions. The annual interest expense resulting from the financing is expected to be approximately US$50 million. Quantum expects the transaction to be up to US15 cents accretive on an earnings per share basis, with the accretion beginning to appear in its financial results in the March quarter of next year.
Heading up the sale of the deal to both sets of customers, Quantum claims that this acquisition will create, the "leading global storage company specialising in backup, recovery and archive solutions."
The company is claiming annualised cost synergies of approximately US$75 million to US$80 million, compared to the US$45 million it had initially estimated when it announced the definitive agreement.
"We are bringing together two long-standing leaders in backup, recovery and archive to create the largest independent company in this market, with more than 50 years of experience in meeting customer needs," said Rick Belluzzo, chairman and CEO of Quantum.
One major thrust of the deal is the increase the penetration into the OEM market. This currently represents some 40% of Quantum's global revenues.
As a global storage leader specialising in backup, recovery and archive, Quantum has the focused expertise that customers need as they struggle to meet the increasingly complex and continually evolving challenges in this critical area of storage. With the acquisition of ADIC, Quantum offers a comprehensive portfolio of platform-independent systems, software, devices and media that reflect a deep commitment to customer-driven innovation - for example, both companies have been pioneers in developing disk-based virtual tape libraries for open systems environments and building remote monitoring and intelligent diagnostic capabilities in tape automation systems.
In addition, with combined revenues exceeding $1.2 billion over the last four quarters and a significantly larger sales and service infrastructure, Quantum now has the scale to engage with customers at a more strategic level. "The data protection market is evolving rapidly, as IT professionals enhance their tape-based data protection strategies with disk-based backup and archive solutions and new software functionality," said John McArthur, group vice president and general manager of IDC's Information Infrastructure and Enabling Technologies Group.
"Quantum's acquisition of ADIC positions the company as a more critical player in this expanding data protection market. The combined company will have the scale and capability to offer not only tape solutions but also a strong set of disk-based solutions, an expanded software portfolio and a broader range of services."
In preparation for the completion of the acquisition, Quantum and ADIC teams have been working to ensure that the newly combined company continues to meet the needs of existing customers and partners on both sides during the integration of the two companies.
As a result, Quantum today announced that it will continue to: sell and support all current Quantum and ADIC products; sell all products through the companies' respective partners and distribution channels; and maintain existing service contracts and product warranties. Quantum has also moved quickly to finalise its Sales, Marketing and Service organisation, and all customer-facing positions, roles and responsibilities will be finalised by next week. With the completion of the acquisition, Quantum will have nearly a thousand Sales, Marketing and Service employees providing informed expertise, advice and support to customers around the world.