Feeds

Enough is enough! Plasmon board recommends sale

$25 million private equity bid approach supported

Intelligent flash storage arrays

Enough's enough! Get me outta here. The Hanover Investors-backed Plasmon board has had it up to here and is pulling the plug.

With Q1 fiscal '09 sales 20 per cent below expectations it's showing positive feelings towards a $25 million bid from a US-based technology private equity firm, identity unknown.

Plasmon is a developer and maker of UDO optical drives, and a supplier of Archive Appliance software and products which meld the optical drives with RAID-protected disk storage to provide a virtualized 2-tier archive. It has a legacy line of UDO-based G-Series libraries and an abandoned line of RAID products.

Surprisingly, given Plasmon's history and recent vigorous but uncompleted restructuring, the bidders have included funds in their bid to complete the restructuring process. That's understood to mean a board-level replacement with the existing operational management and its overall strategy continued. It may be that Hanover Investors is strapped for cash and simply needs to get out.

Plasmon logo

Plasmon will, if the bid succeeds, become a US-owned, privately-held corporation. The understanding is that there are 21 business days from today in which shareholders can agree or not to the bid, meaning Monday, October 6th is the day the bid's success or failure will become clear.

It is understood that the mood inside Plasmon is one of moderate confidence that the bid will succeed and that it is a good thing, a positive event in that the bidders see a successful and profitable Plasmon as a real possibility. Plasmon would also be freed from the restrictions of being a public company and be somewhat nimbler in the way it operates.

The Cambridge, England-based firm's problems stem directly from its UDO technology, which was developed by Plasmon alone as a follow-on to the then existing magneto-optical (MO) drives foreseen as coming to the end of their life in the late nineties. UDO was a bold and visionary step and a step too far as well, costing the jobs of board members and executives as the revenues it promised were never delivered in high enough amounts to offset the costs of developing the drive and media. In the end the low sales of drive meant its production costs were too high and this killed hopes of a UDO-led product sales recovery. Hence the move up the archive stack to software and an appliance-led sales strategy with disk array partners, such as NetApp.

With holographic storage maker InPhase also in trouble, it looks as if the light at the end of the business optical storage tunnel could be illusory.

The Plasmon board lookied for additional investors but had not found the money needed to fund working capital requirements, instead receiving a potential takeover approach. It is in "preliminary discussions" with the private equity group concerned.

The shares were trading at just over a penny yesterday, with the bid at 0.25p/share, yes, a quarter of a penny!, and were £0.51 in April 2007. Investors, especially longer-term investors, will take a tremendous bath. Many will be disgusted, even seething.

Timeline

September '08 - Board (meaning Hanover Investors) pulls the plug

August '08 - Announces need for re-finacing to tide over next two quarters - Q1 fy'08 results 20 per cent down

July '08 - Deal to work with Mimosa NearPoint archive software

June '08 - Deal to work with NetApp arrays - Plasmon announces reduced losses for fy'07 year.

May '08

- Plasmon moves into small facility in Colorado Springs - Outsources manufacturing

April '08 - Raises £10 million (then $20 million) at £0.10/share to expand sales channel. These investors will make money.

November '07 - Steve Murphy, ex-Softek CEO, becomes Plasmon CEO. He is US-based. Alters product strategy and grows reseller channel amongst many other initiatives

May '07 - Managing Director Nigel Street forced out and replaced by Hanover Investors' Rod Powell as interim MD. He starts transitioning company from bering engineering-led to customer and market-driven. US market is key. The in-house RAID products are dumped.

March '07 -Hanover Investors buy 24 per cent of Plasmon's shares at £0.20/share.

May '06 - 60GB UDO-2 media demonstrated.

April 2006 - £5.8 million raised by share placing at £0.815/share to fund development and marketing of UDO2.

Sep '97 - Nigel Street becomes MD. Starts UDO development strategy.

®

Beginner's guide to SSL certificates

More from The Register

next story
729 teraflops, 71,000-core Super cost just US$5,500 to build
Cloud doubters, this isn't going to be your best day
Azure TITSUP caused by INFINITE LOOP
Fat fingered geo-block kept Aussies in the dark
Want to STUFF Facebook with blatant ADVERTISING? Fine! But you must PAY
Pony up or push off, Zuck tells social marketeers
Oi, Europe! Tell US feds to GTFO of our servers, say Microsoft and pals
By writing a really angry letter about how it's harming our cloud business, ta
You think the CLOUD's insecure? It's BETTER than UK.GOV's DATA CENTRES
We don't even know where some of them ARE – Maude
SAVE ME, NASA system builder, from my DEAD WORKSTATION
Anal-retentive hardware nerd in paws-on workstation crisis
Astro-boffins start opening universe simulation data
Got a supercomputer? Want to simulate a universe? Here you go
prev story

Whitepapers

Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Getting ahead of the compliance curve
Learn about new services that make it easy to discover and manage certificates across the enterprise and how to get ahead of the compliance curve.
Top 5 reasons to deploy VMware with Tegile
Data demand and the rise of virtualization is challenging IT teams to deliver storage performance, scalability and capacity that can keep up, while maximizing efficiency.