Quinta purchase means Seagate?s high-end boost is no optical illusion

Disk drive vendor Seagate Technology has filled a hole in its high-end portfolio by paying $230 million for Quinta.

The acquisition follows the two profit warnings issued last month when Seagate was forced to revise its earlier predictions of slow growth. At the time, Seagate blamed weak demand for its high-end storage products but the acquisition of California-based Quinta is seen as a way of bolstering its high-end offerings.

Quinta manufactures optically assisted Winchester storage technology which, Seagate says, complements its own products and will help the vendor address the need for ultra-high capacity online storage.

A Seagate representative said: ?This will basically help [Seagate] create much higher density disk drives, dramatically increasing the density of disks by up to three to five times higher than existing Winchester technology.?

Seagate, which already owns a 10 per cent stake in Quinta, will now acquire the entire stock. Other shareholders will receive cash payments of up to $230 million once the deal is closed. Further payments of $95 million will be received subject to unspecified production criteria being fulfilled by Quinta, which will operate as a wholly owned subsidiary.

Seagate will incur a charge of $180 million and $215 million to its operations in the quarter when the transaction closes, related to the write-off of in-process R&D.

• Seagate has announced a strategic agreement with Gadzoux Microsystems, a California-based supplier of fibre channel storage area networking products. Seagate will invest $10 million and will take a seat on the board.