Under the terms of the merger agreement, roughly 12.9 million newly issued shares of Storage Dimensions' common stock worth $60 million will be swapped for all outstanding shares of Artecon stock. The deal is expected to close by March, pending shareholder and regulatory approval.
Storage Dimensions executives said they are hoping the merger will boost sales force productivity, which has lagged in the past and negatively impacted third-quarter results.
In related news, Storage Dimensions said it expects to post net sales for the fourth quarter ending December 31 of approximately $16.5 million to $17.5 million and a net loss of 11 cents per share. The company added it will announce these results in January.
The two storage firms are hoping to achieve competitive and technology benefits as a result of the deal. Storage Dimensions' family of tape backup products will be available to support Artecon's product offerings and Unix user base, and Artecon's network-attached storage systems will now be available to Storage Dimensions' customers. Artecon's fiber channel interface development is expected to be ported to Storage Dimensions' products resulting in boosted performance, the companies said.