Quantum Corporation to Acquire Advanced Digital Information Corporation
May 02 2006 - 5:12PM
PR Newswire (US)
Combined Company Will Provide Most Comprehensive and Integrated
Range of Solutions for Storing, Managing, Protecting and Recovering
Data SAN JOSE, Calif., May 2 /PRNewswire-FirstCall/ -- Quantum
Corp. (NYSE:DSS), a global leader in storage, today announced a
definitive agreement under which Quantum will acquire Advanced
Digital Information Corp. (NASDAQ:ADIC) for approximately $770
million. With combined revenues exceeding $1.2 billion over the
last four quarters, the two companies are joining to provide
customers with the most comprehensive and integrated range of
solutions for securely storing, managing, protecting and recovering
their data in open systems IT environments. Bringing the two
companies together will enable Quantum to deliver greater
innovation, value and support to end users, channel partners and
OEMs. In addition, the combination will strengthen Quantum's
financial position, expand its market access and increase its
opportunities for growth. The transaction is expected to be up to
15 cents accretive to Quantum on a cash earnings per share basis,
with annual cost synergies of approximately $45 million in the
first full year of combined operations. The company expects that
this accretion should start to be reflected in its financial
results within the second full quarter following the close of the
transaction. Based on the complementary nature of the two
companies' businesses, savings are expected to come primarily from
economies of scale and manufacturing efficiencies in cost of goods
sold, reduction of duplicative operating expenses and sharing of
R&D and marketing costs. Given Quantum's previous success in
integrating Benchmark and Certance after those acquisitions, the
company expects a smooth and expeditious integration of ADIC. "We
are very excited about bringing Quantum and ADIC together to create
what will clearly be the largest independent provider of backup,
recovery and archive solutions and a global leader in addressing
customers' evolving data protection challenges," said Rick
Belluzzo, chairman and CEO of Quantum, who will hold the same
position in the combined company. "With an unparalleled portfolio
of systems, software, devices and media, we will be able to
integrate these assets and incorporate value-add features to offer
best-of- breed solutions for customers of all sizes. Our enhanced
financial strength will also enable us to increase our investments
in new products and services both within and beyond our core
business." "Joining with Quantum will deliver tremendous value to
both our shareholders and customers," said Peter van Oppen,
chairman and CEO of ADIC. "The combined company will provide a
single source of intelligent and innovative backup, recovery and
archive solutions that enable end users to reduce costs and more
easily protect and manage their business-critical data. The
combination will also create a stronger go-to-market
infrastructure, with larger and better leveraged sales and service
capabilities through which we can offer greater support to
customers." Executing on Quantum's Strategy The acquisition of ADIC
represents a major milestone in Quantum's strategy to solidify its
position as one of the leading independent storage companies, to be
a trusted partner for customers around the world and to deliver
increased shareholder value: -- Expanded Market Access -- Quantum
will have a much more significant presence in the branded channel
and a broader base of OEMs. ADIC has been particularly strong in
the enterprise space, complementing Quantum's success in the volume
end of the market, and the combined entity will have greater
critical mass in serving midrange customers. Quantum will nearly
triple its sales force, resulting in increased global scale that
will be especially evident outside of North America. Quantum will
also be able to leverage ADIC's success in important market
segments, including the government sector and data management
software. -- Stronger Growth Platform -- Both Quantum and ADIC have
been at the forefront of developing innovative solutions in
disk-based data protection, one of the most dynamic and fastest
growing segments of storage. The combined company will be able to
capitalize on the scale and synergies in this area, as well as
build upon ADIC's StorNext(R) data management software. Because the
combination will improve the company's overall tape business, it
will enable Quantum to increase its investment in high growth
opportunities. In addition, the broader base of R&D expertise
will provide more avenues for collaboration and innovation across
engineering functions, enhancing the development of new
technologies to address emerging customer needs. -- Enhanced
Financial Position -- With more to offer customers and a larger
market presence, Quantum will expand and diversify its revenue
base. The combined company will also have an increased proportion
of branded channel and service business, both of which carry higher
relative margins. In addition, the greater scale and operational
efficiencies resulting from the combination will enable the company
to achieve significant synergies and generate more cash and profit.
"This is a brilliant strategic move by Quantum and great news for
customers," said Steve Duplessie, founder and senior analyst of
Enterprise Strategy Group. "The combined company will have an
enormous set of offerings, the scale, footprint and financial
foundation to really have an impact in the data protection market.
This acquisition propels Quantum into a clear top three position
among the largest data protection suppliers, and makes them big
enough to control their own fate. I love this deal." Additional
Details Regarding the Definitive Agreement Under the terms of the
definitive agreement, approved by both companies' Boards of
Directors, Quantum will acquire all outstanding shares of ADIC.
ADIC shareholders will receive $12.25 per share in cash, with the
right to elect, in lieu of cash, 3.461 shares of Quantum stock for
each ADIC share they own. The stock election is subject to
pro-ration such that Quantum will issue no more than approximately
10% of the total merger consideration in Quantum stock. Quantum
intends to fund the transaction through a combination of cash on
hand and a financing commitment from KeyBanc Capital Markets
(NYSE:KEY). The transaction is subject to customary closing
conditions and regulatory approvals, as well as approval by ADIC
shareholders. Quantum expects this to take 3-4 months, during which
time the two companies will continue to operate independently.
Acting as financial advisors in connection with the transaction are
Merrill Lynch & Co. for Quantum and Credit Suisse First Boston
for ADIC. Serving as legal counsel are Wilson Sonsini Goodrich
& Rosati for Quantum and Perkins Coie for ADIC. Conference Call
and Audio Webcast Notification Quantum will hold a conference call
today, May 2, 2006, at 2:00 p.m. PDT, to discuss both its planned
acquisition of ADIC and fiscal fourth quarter results (see separate
press release issued today, titled "Quantum Corporation Reports
Fiscal Fourth Quarter Results"). Press and industry analysts are
invited to attend in listen-only mode. Dial-in number: 303-275-2170
(U.S. & International). Quantum will provide a live audio
webcast of the conference call beginning today, May 2, 2006, at 2
p.m. PDT. Site for the webcast and related information:
http://investors.quantum.com/. About ADIC Advanced Digital
Information Corporation is a leading provider of Intelligent
Storage(TM) solutions to the open systems marketplace. ADIC is the
world's largest supplier of automated tape systems using the drive
technologies most often employed for backing up open system,
client-server networks.* The Company's data management software,
storage networking appliances, and disk-based backup and restore
solutions provide IT managers innovative tools for storing,
managing and protecting their most valuable digital assets in a
variety of disk and tape environments. ADIC storage products are
available through a worldwide sales force and a global network of
resellers, OEMs and partnerships, including Apple, Dell, EMC,
Fujitsu-Siemens, HP, IBM and Sun. For further information, visit
http://www.adic.com/. *Market Share: Gartner Dataquest, Tape
Automation Systems Market Shares, 2004, F. Yale, April 2005. ADIC
and StorNext are registered trademarks and iMover is a trademark of
Advanced Digital Information Corporation About Quantum Quantum
Corp., a global leader in storage, delivers highly reliable backup,
recovery and archive solutions that meet demanding requirements for
data integrity and availability with superior price/performance and
comprehensive service and support. Quantum offers customers of all
sizes an unparalleled range of solutions, from leading tape drive
and media technologies, autoloaders and libraries to disk-based
backup systems. Quantum is the world's largest volume supplier of
tape automation, one of the leading providers of tape drives, and a
pioneer in the development of disk-based systems optimized for
backup and recovery. Quantum Corp., 1650 Technology Drive, Suite
700, San Jose, CA 95110, (408) 944-4000, http://www.quantum.com/.
Additional Information and Where to Find It Quantum plans to file
with the SEC a Registration Statement on Form S 4 in connection
with the transaction, and ADIC plans to file with the SEC and mail
to its stockholders a Proxy Statement/Prospectus in connection with
the transaction. The Registration Statement and the Proxy
Statement/Prospectus will contain important information about
Quantum, ADIC, the transaction and related matters. Investors and
stockholders are urged to read the Registration Statement and the
Proxy Statement/Prospectus carefully when they are available.
Investors and stockholders will be able to obtain free copies of
the Registration Statement and the Proxy Statement/Prospectus and
other documents filed with the SEC by Quantum and ADIC through the
web site maintained by the SEC at http://www.sec.gov/. In addition,
investors and stockholders will be able to obtain free copies of
the Registration Statement and the Proxy Statement/Prospectus from
Quantum by contacting Investor Relations at (408) 944-4450 or , or
from ADIC by contacting Stacie Timmermans at (425) 881-8004 or .
Quantum and its directors and executive officers may be deemed to
be participants in the solicitation of proxies from the
stockholders of ADIC in connection with the transaction described
herein. Information regarding the special interests of these
directors and executive officers in the transaction described
herein will be included in the Proxy Statement/Prospectus described
above. Quantum, the Quantum logo, DLT, DLTtape and the DLTtape logo
are registered trademarks of Quantum Corporation. SDLT and Super
DLTtape are trademarks of Quantum Corporation. All other trademarks
are the property of their respective owners. "Safe Harbor"
Statement under the U.S. Private Securities Litigation Reform Act
of 1995: This press release contains "forward-looking" statements
within the meaning of the Private Securities Litigation Reform Act
of 1995. These forward-looking statements include statements
regarding the products, services and storage solutions that Quantum
will provide after the closing of the transaction, the effect of
the merger on Quantum's financial position, the amount and timing
of expected synergies from the transaction, the expectation
regarding the integration of the two companies' operations after
the closing, statements regarding Quantum's expanded market access
after the closing of the transaction, the expectation that Quantum
will derive an increased proportion of its revenue from branded
channel and service businesses, and the expected timing for closing
the acquisition within the next three to four months. Such
statements are just predictions and involve risks and uncertainties
such that actual results and performance may differ materially.
Factors that might cause such a difference include the failure to
(1) receive regulatory approval and approval from ADIC's
stockholders for the acquisition, (2) successfully integrate ADIC,
its products and its employees into Quantum and achieve expected
synergies, (3) compete successfully in the highly competitive and
rapidly changing marketplace for backup, recovery, archive and
other storage products and services, and (4) retain ADIC's key
employees. A detailed discussion of other risks and uncertainties
that could cause actual results or events to differ materially from
the forward-looking statements is included in Quantum's and ADIC's
most recent filings with the Securities and Exchange Commission.
Quantum and ADIC undertake no obligation and do not intend to
update these forward-looking statements to reflect events or
circumstances occurring after this presentation. DATASOURCE:
Quantum Corp. CONTACT: Brad Cohen, Public Relations,
+1-408-944-4044 or , or Jenny Lee, Investor Relations,
+1-408-944-4450 or , both of Quantum Corp.; or Stacie Timmermans,
Investor Relations of ADIC, +1-425-881-8004 or Web site:
http://www.quantum.com/
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