Sun set to splash out on Encore acquisition

Sun Microsystems has signed an agreement to acquire storage and data retrieval systems vendor Encore Computer for $185 million.

The sale, expected to be completed in mid-August, will boost Encore?s balance sheet and go towards paying off debt and preferred stock held by Gould Electronics. In March, the company restructured $40 million of its debt to Gould into preferred stock.

The deal, which will include Encore?s Infinity storage data share products, has been critised by storage vendor EMC. Mike Maunder, marketing director at EMC Europe, said: ?For Sun it means a short cut through to the enterprise.?

Chris Atkins, Encore UK marketing manager, insisted it was a positive move, as the weight of Sun behind the company would benefit the organisation. But he refused to comment on changes to existing distribution partners as a result of the purchase, insisting this was a decision to be made by Sun.

One of Encore?s UK distributors, Memorex Telex, had been selling the flagship Infinity data sharing storage product, but decided to drop the line in March because, it claimed, ?the UK market has been slow on the uptake, waiting for endorsement of the technology from market leaders?.