Data storage company Quantum Corp has agreed to acquire Meridian Data Inc, a supplier of network attached storage appliances, in an all stock deal valued at $85m. The acquisition comes as Quantum continues to diversify from its core hard drive business, which currently accounts for about two-thirds of revenue, down from 100% just a few years ago.
Under the terms of the agreement, Meridian Data stockholders will receive 0.489 of a Quantum share for each share held, subject to adjustment based on the trading range of Quantum stock before the completion of the merger – currently expected in September. Based on Monday’s closing price, Meridian shareholders will receive about $9.41 a share, a 169% premium over its $3.50 closing price.
Upon completion of the deal, Meridian will operate as a Quantum unit, reporting to Peter Van Cuylenburg, president of Quantum’s DLT and storage systems group, the company said. All future products will be marketed under the Quantum name, however.
Quantum said the deal should essentially be viewed as a software acquisition, as its main interest in Meridian Data was what it claims is the industry’s first robust storage operating system for entry- and workgroup-level appliances. The other attraction for Quantum was the company’s Snap! Server network attached storage appliance itself.
Quantum reckons it will now be able to enter a market pegged by analysts to be worth about $2.5bn by 2002 and, in the longer term, to develop software to support embedded intelligence in storage devices and systems. The two companies say the deal is an ideal fit, as the Snap! product line has always had a bright future, but Meridian simply lacked the resources and market presence to capitalize on its technology.
In a related move, Quantum also announced a share repurchase authorization for up to $200m in stock. Part of the buybacks will be used to offset the dilution caused by the shares issued to cover the acquisition. á
