Veteran Unix systems integrator Artecon Inc has now won approval for its planned merger with RAID systems supplier Storage Dimensions Inc, plans for which first emerged at the very end of last year. The transaction involves the issue of 13.3 million new shares of Storage Dimensions common stock for all outstanding Artecon shares, and will be accounted for as a purchase by Artecon of approximately $31.7m. Artecon, a privately held company based in Carlsbad, California, keeps its name and its chief executive officer, James Lambert, but takes on Storage Dimension’s Nasdaq listing under the new symbol ARTE. The new company says its combined parts give it a broader line of server storage systems for the PC LAN and Unix markets, with products in both server and network-attached storage, enterprise storage management and tape backup. Artecon, which was founded in 1984, shifted direction towards storage in the early 1990s, and acquired storage vendor Falcon Systems Inc last August, a company with revenues of around $55m. It now offers RAID systems for telecommunications and internet applications under the Extreme product name. Milpitas, California-based Storage Dimensions Inc was the result of a $21m buy-out of a Maxtor Corp subsidiary in 1992, and started its life as a public company under a cloud just one year ago, when its initial public offering got away at just $7 a share, where it had been hoping for $8.50 to $10.50. Since then, most of the news has been bad. Co-founder Gene Bowles recently jumped ship to become president and chief executive officer of Database Excelleration Systems Inc, the Santa Clara, California-based intelligent solid state disk company, and most of the other senior management appear to have left. One reason for the merger is to bolster the sales team, which will now be 70 strong, and have a greater international presence. Artecon says it will take a one-off charge of $14.5m for the first calendar quarter of 1998 for acquired in-process research and development and inventory adjustments of approximately $2m to $3m. Shares closed yesterday up 0.125 at $3.68.
