Adaptec Makes Snap Decision
A little more than a year after acquiring Snap Appliance for $100 million, Adaptec has announced plans to divest its storage systems business to focus on software and serial storage technologies.
"Our management team has been conducting a very thorough analysis of all of Adaptec's businesses and operations," said Scott Mercer, interim CEO of Adaptec, in a statement. "While we have successfully built a solid suite of storage systems products and gained a volume leadership position in NAS, it became clear that we needed to simplify our business model."
With sales falling at a double-digit rate and its stock down by half this year, Adaptec President S. "Sundi" Sundaresh said the company had to act.
"It was a hard decision for us, but we feel that selling our systems business is the best move for the company and its shareholders as we take the necessary steps in Adaptec's recovery," said Sundaresh. "This will allow us to focus our internal resources on capturing a leadership position in the emerging Serial ATA and Serial Attached SCSI markets."
The systems business, which also includes Adaptec's $30 million acquisition of Eurologic, accounts for $80 million of the company's roughly $400 million in annual sales.
Adaptec said it plans to focus on its core components business, including its RAID software, virtualization software stack and Adaptec Storage Manager. Moving forward, Adaptec said it will also "focus on activities that improve its market leadership in the channel, capturing greater share in serial technologies, as well as on expanding product capabilities and performance."
Despite a rough few quarters, Adaptec's cash position remains strong, with $480 million in cash and $240 million in debt as of June 30.
The company has retained Credit Suisse First Boston (CSFB) as its financial advisor, and said it will discuss more details in its Nov. 3 earnings conference call.