Under an agreement announced Tuesday, Snap Appliance will pay Quantum $11.3 million and employ "a substantial number" of the Quantum employees who have been working on Snap products. Snap's new backers include Moore Capital Management and Mellon Ventures, but Quantum will keep a minority interest in the new company.
The deal, taking place under the tenure of new Chief Executive, a former Microsoft executive, is the second time Quantum has tried to set Snap on its own feet. Two years ago, the company had been hoping to spin off Snap through an initial public offering, but Quantum that plan in 2001 after investors turned sour on technology ventures.
Eric Kelly will be Snap's CEO. The deal is expected to close by the end of October.
Quantum acquired the Snap line with the acquisition of Meridian Data in May 1999, a time of industry. Now customers' tight purse strings have changed the climate; Quantum rival Maxtor a direct Snap competitor in August because sales were slim.
Milpitas, Calif.-based Quantum has been retrenching to its core business, tape-storage technology used to back up vital corporate data. Itits hard-drive business to Maxtor in March 2001, its "Rushmore" high-speed memory-based storage systems in May 2001, and tape-drive maker Benchmark Technologies in September 2002.
Snap Appliance, based in San Jose, Calif., makes "network-attached storage" (NAS) products, systems that store files over regular Internet Protocol (IP) networks. The new Snap products will incorporate software from a privately held company called .
During brighter times, Snap's products wereby Dell Computer, but Dell the arrangement after coming up with its own products.
Larger companies, including EMC, Network Appliance and Sun Microsystems, maintain their interest in the NAS market, though many of them have focused on higher-end products costing tens or hundreds of thousands of dollars.