Feeds

Mixed tape: Overland Storage buys Tandberg Data in CASH-FREE transaction

$42m price tag - but Overland's had to pay completely in stock

High performance access to file storage

Struggling tape and disk storage vendor Overland Storage is buying recovering tape systems vendor Tandberg Storage for $42m in stock to help boost its revenues.

Tandberg Data supplies tape and disk-based storage and data protection products to small and medium businesses. It has recently recovered from a bankruptcy experience in 2009, under the stewardship of Pat Clarke’s executive team, and has just about become profitable again.

Overland Storage has had a similarly difficult time of late, and has product overlap with its slurpee – although it also supplies scale-out filer and block-access storage arrays for on-premise and cloud storage for all types of data. It too has been trying to recover from a declining tape market, once the mainstay of its business, for many years – during which it has made continuous losses and its exec team has acted as financial Houdinis, escaping from one perilous financial situation after another.

Cyrus Capital, Tandberg’s owner and a major Overland investor, has been pushing for a merger or acquisition between the two for some months.

Eric Kelly, Overland’s president and CEO, said:

The Overland and Tandberg combination will accelerate our strategy of becoming a global leader in the data management and data protection industry. With more than $100 million in annual revenue for the combined company during the last fiscal year, we expect the combination of these two businesses to provide us with a clearer path to profitability. The combined company will offer one of the broadest product lines and service offerings in the enterprise storage marketplace, and have the resources necessary to expand our market presence, fuel our growth and deliver innovative products and cloud offerings in the future.

The combination of Overland and Tandberg will expand our geographical reach in Europe , Asia and the Middle East, as well as strengthen the research and development team. It will also enable us to leverage the world-class manufacturing facility in China.

Tandberg Data CEO Pat Clarke said: “We look forward to joining forces with Overland and are excited to combine our substantial resources to create a stable platform for profitability, enabling greater focus on accelerating revenue growth. Together we will be able to support our customers globally with over 16,000 channel and service partners."

Some details:

  • It is a 100 per cent stock transaction.
  • Cyrus Capital, the owner of Tandberg Data, and other convertible debt-holders will convert approximately 81 per cent of their currently outstanding convertible debt into shares of Overland common stock at a price of $1.30 per share.
  • Eric Kelly will continue to serve as president and CEO of the combined company. Kurt Kalbfleisch will continue to serve as CFO and Randy Gast of Overland will serve in newly created position of COO.
  • Overland's board of directors will be expanded to seven directors, of which five will be current board members. The other two will be new board members appointed by Cyrus Capital.

Tandberg is the larger company in terms of product revenues. There will be Tandberg executive representation in the combined company, on the sales side for example, but Clarke himself will gradually exit. He said the two companies, by combining, would have more firepower and scale, and virtually no debt. Together the new organisation has a much better set of possibilities for growing, perhaps with an acquisition or two in the future.

Clarke said it will be all down to execution, noting, “The plan looks good.”

The acquisition is expected to complete by the end of the year. Read the PDF of the relevant SEC 8-K filing here. ®

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.