Emulex Picks Up Sierra Logic - EnterpriseStorageForum.com

Emulex Picks Up Sierra Logic

Storage industry consolidation continues apace, with three mergers announced overnight Tuesday.

Emulex announced plans to acquire storage chipmaker Sierra Logic, while Rackable Systems picked up Terrascale Technologies, and Exabyte agreed to a combination with Tandberg Data.

Emulex will pay $180 million in cash for Sierra Logic, which has made a name for itself by getting SATA and Fibre Channel to work together (see Sierra Logic Makes SATA Play Nicely with Fibre Channel).

Emulex noted that Sierra Logic's products, including embedded bridges and routers, are deployed by OEMs in conjunction with Emulex's InSpeed embedded switches and I/O Controller (IOC) products to provide a fully complementary embedded end-to-end solution. Sierra Logic's customer include Engenio, Hitachi, Network Appliance, NEC, Sun Microsystems and Xyratex, and the company recently shipped its two millionth SATA port.

"This acquisition solidifies Emulex's embedded multi-protocol strategy and is another critical step toward becoming the market leader in the end-to-end embedded storage components market," Emulex CEO Paul Folino said in a statement. "Together, Emulex and Sierra Logic will provide our OEM customers with embedded solutions for the full range of enterprise server and storage systems."

The acquisition is expected to close by the end of September, and Emulex said Sierra Logic is expected to contribute $8-$10 million in revenues for the December quarter.

Baird analyst Daniel Renouard said the embedded market "will prove a nice niche for Emulex over time, and synergies between Vixel and Sierra Logic appear tangible — similar customer bases and complementary technology."

And Sierra Logic's triple-digit growth rate won't hurt either, Renouard said. Sierra grew 250% last year and will clear 100% growth this year, he said.

Rackable Acquires Terrascale

Rackable Systems, meanwhile, continued its move into the storage space with the $38 million acquisition of Terrascale Technologies, which makes a clustered file system solution for high-performance I/O connectivity between servers and commodity-based storage subsystems.

The firms say Terrascale's clustered storage systems eliminate the performance bottleneck in legacy NAS architectures by delivering a single file system solution that scales nearly linearly in both capacity and performance. Terrascale's technology is aimed at large Linux clusters found in Internet and HPC environments.

"As the demand for high-capacity, open architecture storage systems continues to grow, Terrascale's technology provides a very compelling alternative to expensive solutions from legacy storage vendors," stated Rackable CEO Tom Barton. "This solution will significantly boost the scalability and manageability of our storage offerings, including our high-capacity storage servers."

Rackable also has the option to retain the rights to a technology known as Distributed Parity Engine (DPE) for an additional $9 million.

Exabyte Combines with Tandberg Data

Tape backup company Exabyte will be acquired by Tandberg Data Corp. for $28 million and the assumption of certain liabilities, creating a data storage company with $215 million in sales.

The deal needs the approval of Exabyte shareholders and may be terminated by either party if the transaction is not completed by December 31. Exabyte intends to liquidate and dissolve after the deal closes.

In a statement, Tom Ward, CEO of Exabyte, said, "the operational synergies resulting from the combination will allow the new company to operate from an improved position of financial strength and stability in the future."

Exabyte management is expected to continue with Tandberg and will focus on Exabyte's VXA and LTO technologies and products. All employees of Exabyte will be offered positions with Tandberg.

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