Quantum Takes Tape Rival ADIC

The shrinking roster of tape library vendors lost another player when Quantum acquired rival ADIC for $770 million Tuesday night, creating a larger player looking to take on Sun and IBM. (See Quantum Buys ADIC.)

The acquisition brings together companies with combined revenues of more than $1.2 billion over the past year. Quantum CEO Rick Belluzzo says he expects the deal will give his company a revenue boost and accelerate growth in the tape and disk backup markets. It also makes Quantum a partner with EMC, which has a reseller deal with ADIC. (See EMC to Resell ADIC Tape.)

"This gives us the ability to have a greater presence in the marketplace," Belluzzo said in a conference call to discuss the deal. He said the broadened product line should give Quantum more strength in dealing with OEMs that sell tape libraries. He acknowledged that winning OEM deals is hard "unless we have the ability to have market influence quickly, and that's been a limitation of the company."

Belluzzo says he expects the deal to close in three or four months. At the close, ADIC shareholders can receive $12.25 per share in cash or 3.461 shares of Quantum stock for each ADIC share they own.

Quantum could use a revenue boost. The sale came on a day when Quantum announced disappointing revenues of $206 million, down 14 percent from the same quarter last year and below its previous guidance of $210 million to $225 million. (See Quantum Posts Results.) Quantum blamed the poor performance on product transitions to new tape and disk products.