Under the memorandum of understanding, Sun will acquire Encore's Infinity SP storage product assets and technology. This technology allows data sharing from mainframe computers to open systems, as well as within open system environments.
"This proposed transaction reinforces Sun's commitment to be the industry's leading open enterprise systems vendor," said John Shoemaker, vice president of Sun's enterprise server and storage group, in a statement. "With the acquisition of Encore's storage business, Sun would gain an extremely talented group of employees with expertise in delivering solutions and support for the uninterrupted, transparent sharing of information across different computer platforms."
Meanwhile, Encore will be able to bolster its balance sheet with the transaction and undergo a restructuring. The company plans to use the proceeds from the deal to retire debt and outstanding convertible preferred stock held by Gould Electronics.
Charles Anderson, an Encore spokesman, declined to release details on how the company will restructure its scalable real-time data storage, data retrieval, and data sharing operations.
The companies still have to negotiate a definitive agreement and no time table for closing the deal is available, Anderson added.
It is also unclear how the Encore storage capabilities will be integrated in Sun offerings, such as its recently introduced clustering software, code-named Full Moon.
Sun could not be reached by press time.