Adaptec to snap up Snap Appliance

Computer component maker Adaptec has agreed to acquire data storage device company Snap Appliance, the companies said Tuesday. Adaptec, which makes products including network interface cards and controllers for the Serial ATA disk drive interface, said the purchase price is expected to be about $100 million. The amount represents about $91 million of cash and $9 million of assumed stock options. Adaptec said it expects the transaction to generate more than $40 million in new revenue over the next four quarters.

Adaptec has been expanding into standalone storage systems, selling them under its own brand and for use by companies that sell them under their own names. Adaptec acquired external storage system maker Eurologic in 2003. "I am aspiring to be a major player in the storage market," said Mark Delsman, senior vice president of business strategy at Adaptec. Those aspirations have limits, though--the company is focusing on smaller customers and doesn't expect to become the next EMC, he said. In the company's most recent quarter, $18 million of Adaptec's $125 million revenue was from external storage devices, Delsman said. Industry statistics show an increasing hunger for storage gear, thanks to factors including government regulations for retaining data and the growing digitalization of content such as music. The amount of disk storage system capacity shipped worldwide in the first quarter of this year hit 247 petabytes, up 39.4 percent from the first quarter of 2003, according to researcher IDC.

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News source: news.com

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