ADIC may look to acquire Overland Storage, after it bought a 9.3 per cent share in the vendor last week, according to a filing with the US Securities and Exchanges Commission (SEC).
A section 13D filing to the SEC revealed that ADIC paid $9.5m for the shares in the disk-to-disk backup and tape library hardware vendor.
The statement also revealed that ADIC may be organising its operations to attempt an acquisition of Overland Storage.
The SEC statement said: “ADIC purchased the shares based on its belief that Overland’s current enterprise value and corresponding market prices for the shares represent an attractive investment opportunity, as well as a possible opportunity to facilitate strategic consolidation within the data storage industry.”
Earlier this month, CRN reported that Overland Storage had acquired storage software vendor Zetta systems for $9m, following the termination of its OEM tape emulation agreement with Hewlett-Packard (HP) (CRN, 15 August).
In 2001 ADIC acquired SAN vendor Pathlight Technology for $265m as part of a strategy to broaden its storage portfolio. The brand has since been dissolved into the vendor’s product line.
Chris James, European marketing director at Overland Storage, said: “Our share price has dropped on the back of the HP announcement, so it would not be a surprise if ADIC does decide to invest in Overland.
“However, I have heard nothing about an ADIC acquisition.”
ADIC’s SEC filing also revealed that the company had a meeting with Overland executives in January to discuss “Overland’s business and future plans”.
ADIC met Overland again last week to discuss the share purchase and the possibility of “combining the operations of the two companies”, according to the filing.
Analyst firm Robert W Baird said an ADIC acquisition of Overland Storage would go against the grain. A representative of the firm said: “This would be an unusual way to acquire another company.
“We believe ADIC management viewed the enterprise value of Overland as an attractive investment, more than a signal of intent to acquire.
“We do not believe the purchase necessarily signifies an acquisition. It is more likely that ADIC management is testing the water.
“While on some levels an acquisition would make sense, given deteriorating fundamentals at Overland, we believe ADIC would be better off standing alone.”
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