The merger of ManagedStorage International Inc. (MSI) and Front Porch Digital seems like an odd marriage, until you realize the bride and groom are closely related [ed. note: or should that make it more odd?]
Digital archive management software company Front Porch Digitals plan to buy storage service provider (SSP) MSI for $39 million in stock brings together two companies run by Tom Sweeney (see Tom Sweeney, President, CEO, and Chairman, ManagedStorage International). Sweeney was the chairman of Front Porch Digital and the CEO of MSI, and the merger might be a last ditch attempt to keep both afloat as a new company called Incentra Solutions.
Sweeney will become Incentras CEO and chairman. [Ed. note: You were maybe expecting Donald Trump?]
Although it was announced as an acquisition by Front Porch, an SEC filing indicates the deal would likely be accounted for as a reverse merger, with privately held MSI acquiring publicly traded Front Porch, and then achieving a reverse IPO. Incentra will be a public company.
Sweeney says the merger will more than double the revenues of Front Porch, which reported $2 million in revenue last quarter and $1.5 million in the first quarter of the year. When Front Porch announced earnings last week, Sweeney said it was cash positive in the quarter for the first time, even though Front Porch lost $510,000. And during the same quarter last year, Front Porch lost $3.2 million.