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Quantum Buys Certance, LTO

Less than a month after revamping its product line to better compete with LTO tape, Quantum Corp. (NYSE: DSS) today bought its own LTO company.

Quantum agreed to acquire private tape rival and LTO pioneer Certance LLC for $60 million in cash, picking up LTO and other technology it lacked.

LTO has emerged as a more lucrative format than the SDLT format that Quantum sells. According to tape market research firm Freeman Reports, LTO tape-library revenue outpaced SDLT by more than a three-to-one margin in 2003 (see Tape Guys Look for Answers and Quantum Outlines Tape Strategy).

Certance is part of an LTO consortium with Hewlett-Packard Co. (NYSE: HPQ) and IBM Corp. (NYSE: IBM). Although it was far behind the other two in revenue, Certance became the first of the three to make the third-generation LTO drive available early this month (see Certance Ships LTO-3 Drives).

Besides LTO, Certance also gives Quantum lower-end tape formats Travan and DDS/DAT. Quantum has traditionally been stronger in the midrange. Quantum CEO Rick Belluzzo says he hopes the deal will close in around six weeks.

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