Source: CNT Nixed TrueSAN Bid

At last minute, CNT ditched plans to buy the SAN management startup, says ex-TrueSAN insider

April 11, 2003

3 Min Read
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CNT (Nasdaq: CMNT) backed out of its bid to acquire TrueSAN Networks Inc. at the last minute, prompting TrueSAN's backers to pull their financial support last month and lay off most of its employees, a former company insider tells Byte and Switch.

Meanwhile, TrueSAN's Website is once again operational after being offline for about a week. The site now lists Mark Hoover, president of consulting firm Acuitive Inc., as the interim CEO. According to his bio on the Acuitive Website, "Mark often takes on the role of interim CEO or acting VP of marketing for clients that require it." [Ed. note: He's also available for bar mitzvahs and weddings.]

But it remains unclear whether TrueSAN intends to try to make another go of it -- and attempt to license its SAN management software to other vendors -- or if the skeleton crew at the company is merely trying to unload its assets to the highest bidder at this point (see TrueSAN Goes Belly-Up).

Reached for comment late Thursday, Hoover told us: "I'm just getting ramped up and don't have anything to comment on right now other than to say if this doesn't work out I'll just go back to doing bar mitzvahs."

Vincent Occhipinti, managing director of Woodside Fund and chairman of TrueSAN's board, did not respond to requests for comment. A message left in TrueSAN's general voicemail system today was not returned.Previously, the startup had allegedly turned down an offer of $5 million from CNT for TrueSAN's intellectual property (see SAN Startups on the Block).

But by mid-March, according to the ex-TrueSAN employee, CNT had reemerged as the only serious candidate to acquire the startup. "We were very close to finalizing a deal with CNT," the source says. "They were the only viable bidder."

CNT, which sells SAN extension devices and provides storage networking consultation services, apparently got cold feet on the deal because it already had a reseller agreement with FalconStor Software Inc. (Nasdaq: FALC) for its virtualization software and didn't want to spoil that deal (see CNT Joins FalconStor Services Program).

"It got very political within CNT," the source says.

After CNT withdrew its bid, TrueSAN's investors -- which include Woodside, Credit Suisse First Boston Corp., Finisar Corp. (Nasdaq: FNSR), JT Venture Partners, Merrill Lynch & Co. Inc., Spring Creek Partners, and QLogic Corp. (Nasdaq: QLGC) -- decided to stop funding the company and, on March 31, laid off most of TrueSAN's employees, our source says. The ex-employee notes that TrueSAN hadn't sold a single copy of the software, because "we never had a product to sell."When asked to comment on this version of events, CNT spokeswoman Jennifer Weidauer said, "This is not an accurate statement overall." She declined to comment further.

Earlier this week, CNT announced plans to buy Fibre Channel director player Inrange Technologies Corp. (Nasdaq: INRG) for $190 million in cash (see CNT Walks Off With Inrange).

Ex-TrueSAN CEO Tom Isakovich, reached via email, also declined to comment, citing nondisclosure agreements. Isakovich resigned from the company on March 27.

The tale of CNT's unconsummated bid for TrueSAN sounds similar to that of Emulex Corp.'s (NYSE: ELX) aborted bid for Fibre Channel-over-IP gateway maker SAN Valley Systems Inc. (see Emulex Jilts SAN Valley).

Todd Spangler, US Editor, Byte and Switch

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