Sun Microsystems it has entered into an agreement to acquire StorageTek for US$4.1bn. The move will create a network computing company with combined revenues of US$13bn a year.
Under the terms of the agreement, approved by both boards of directors, StorageTek stockholders will receive US$37 per share in cash for each StorageTek share for an aggregate value of approximately US$4.1bn, including the assumption of employee stock options.
“Sun’s technical and financial strength puts us in a great position to act as a consolidator in the IT industry. This acquisition is part of an ongoing strategy to respond to customers seeking to rationalise their datacentre purchases — to free up time and dollars to focus on compliance, architectural integration, security and, of course, the bottom line,” said Scott McNealy, chairman and chief executive officer of Sun Microsystems.
“With this announcement, Sun solidifies its leadership position, with the highest volume computing platforms, the most comprehensive data and identity management solutions, and when combined with StorageTek, an unmatched ability to earn the confidence of customers as they develop, deploy and manage information assets throughout their entire lifecycle.
“Together, the two companies enjoy financial strength, a complete systems offering, an impressive list of blue chip customers and global reach. We look forward to welcoming the StorageTek workforce into the Sun organisation and are confident that the combined enterprise, with its broader range of products, services and capabilities will significantly expand our customer base and opportunities for growth,” added McNealy.
Following the completion of the proposed transaction – which will be subject to regulatory approval – StorageTek wil become fully integrated within Sun’s organisation.
In the interim, however, a joint team with representatives of both companies will develop integration plans that build on the technological and product synergies as well as product development practices of both companies.
“StorageTek’s decision to combine with Sun reflects our determination to act in the best interests of our customers, shareholders, employees and other constituents,” said Patrick Martin, chairman, president and chief executive officer, StorageTek.
“By joining forces with Sun to form a combined enterprise with greatly enhanced technological, operational and financial resources, we are positioning that enterprise for accelerated growth and solid performance for years to come. For StorageTek and all our constituents, this is the right transaction, with the right partner, for the right reasons, at the right time,” Martin concluded.
By John Kennedy
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