Feeds

Evaporating Adaptec sells RAID business

PMC-Sierra gets it

High performance access to file storage

Adaptec is selling its RAID channel storage business to PMC-Sierra for $34m, but will keep its Aristos ASIC technology business as it looks for ways to invest its $400m cash pile.

Activist investor Steel Partners gained control of Adaptec a few months ago and is now asset-stripping the business. Adaptec as a RAID adapter company is now dead, and the company consists merely of its portfolio of more than 200 patents, the Aristos ASIC stuff, a few buildings and - the crown jewels, we think - that $400m.

PMC-Sierra said the channel storage business includes Adaptec's RAID storage product line, a well-established global value added reseller customer base, board logistics capabilities, and leading SSD cache performance solutions. PMC-Sierra will also assume certain liabilities related to the business.

Greg Lang, PMC-Sierra's president and CEO, said: "I am excited about this acquisition and the future growth opportunities it presents through the strong strategic fit between our core strengths in enterprise storage and the established channel storage business of Adaptec."

PMC-Sierra expects to employ approximately 90 people from Adaptec located in seven different geographies, with the majority in California.

The Adaptec board stated that it will: "...explore all strategic alternatives to deploy the proceeds of the sale and the Company's other assets, which may include stock buybacks, special cash dividends, future acquisitions and other actions to redeploy capital. Additionally, the Company will, as previously announced, continue to consider its options related to its Aristos ASIC technology business, remaining patents and real estate holdings."

This looks like longhand for saying that everything Adaptec owns is up for sale, and its cash may be used to fill shareholders' pockets directly or to buy other companies. Adaptec is in effect a cash-rich shell.

One odd aspect of the deal, according to Howard Marks of testing lab DeepStorage, is that PMC-Sierra is a chip company and would have wanted the Aristos chip business. The deal as it stands doesn't make sense to him, and Marks thinks that there must be some other aspect to it.

Jack Howard, Adaptec's chairman, said: "This transaction with PMC-Sierra, which represents the sale of a small portion of the Company's total assets ... continues the process of moving the Company away from its previous unprofitable identity as a 'pure-play' technology company. The Board of Directors remains committed to providing value to all of the Company's stockholders, and will aggressively pursue opportunities to deploy the significant cash and liquid assets on hand to create value for the Company's stockholders."

The RAID business sale to PMC-Sierra should close in thirty days. Farewell Adaptec - you're just another storage memory now. ®

High performance access to file storage

More from The Register

next story
This time it's 'Personal': new Office 365 sub covers just two devices
Redmond also brings Office into Google's back yard
European Court of Justice rips up Data Retention Directive
Rules 'interfering' measure to be 'invalid'
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
Cisco reps flog Whiptail's Invicta arrays against EMC and Pure
Storage reseller report reveals who's selling what
Bored with trading oil and gold? Why not flog some CLOUD servers?
Chicago Mercantile Exchange plans cloud spot exchange
Just what could be inside Dropbox's new 'Home For Life'?
Biz apps, messaging, photos, email, more storage – sorry, did you think there would be cake?
IT bods: How long does it take YOU to train up on new tech?
I'll leave my arrays to do the hard work, if you don't mind
prev story

Whitepapers

Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
HP ArcSight ESM solution helps Finansbank
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Mobile application security study
Download this report to see the alarming realities regarding the sheer number of applications vulnerable to attack, as well as the most common and easily addressable vulnerability errors.