In a move designed to expand its DLTtape business, Quantum Corp. Thursday announced plans to acquire Benchmark Storage Innovations Inc.
The deal, which is expected to close in the fourth quarter of 2002, has Quantum acquiring all of Benchmark, including its tape drive and tape media products, in a stock and cash transaction. The Benchmark products will be integrated into Quantum's DLTtape Group immediately and will continue to be manufactured through Benchmark's current outsourcing partners, Mitsumi Electric Co. Ltd. and Beyonics Technology Ltd.
According to the details of the transaction, Quantum will pay Benchmark's equity holders approximately 13.1 million shares of Quantum stock and US$11 million in cash. Additionally, Quantum, which held an approximate 20 percent interest in Benchmark, will pay the other equity holders up to 1.9 million shares of Quantum stock if the DLTtape Group achieves certain performance milestones in sales of Benchmark's products in the first year after the acquisition is completed.
Quantum officials said the acquisition would enable it to offer a broader line of tape drives, ranging from 80GB to 320GB of capacity. including Benchmark's new ValuSmart Tape 160 that doubles the capacity of its ValuSmart Tape 80.
Quantum also announced Thursday that it would outsource its current tape drive manufacturing to Jabil Circuit Inc., an electronic manufacturing service provider.
Quantum officials said the agreement with Jabil would allow it to reduce its manufacturing costs and better focus its resources on developing new technologies.