Quantum to acquire tape drive maker
The maker of tape backup products signs an agreement to acquire Benchmark Storage, a partner that sold a type of tape drive Quantum developed.
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Quantum already held a 20 percent stake in Benchmark. Under the deal, Quantum will pay Benchmark $11 million cash and 13.1 million Quantum shares. If the Benchmark products meet certain sales targets, Benchmark shareholders will receive a further 1.9 million shares, Quantum said.
Now under the leadership of Chief Executive Rick Belluzzo, Quantum makes tapes for backing up data onto tapes so it can be retrieved even if computers crash. Acquiring Benchmark will increase its customer base, the company said. The company also has been augmenting that business with faster disk-based storage systems.
Quantum in recent months was embroiled in a lawsuit with Imation over its DLT tape technology.
On Thursday, Quantum also said it now will rely on contract manufacturer Jabil to build its tape drives, a move the company said would lower its costs. Jabil, which will hire most of Quantum's employees at a drive manufacturing facility in Malaysia, is Quantum's largest supplier of drive components, Quantum said.
Quantum stock dropped 5 cents, or 2 percent, to close at $2.99 Thursday before the acquisition plan was announced. Jabil stock declined 22 cents, or 1 percent, to $18.32 on Thursday.
Benchmark drives will continue to be built by Mitsumi Electric and Beyonics Technology.