Santa Clara, Calif. – Server maker Sun Microsystems Inc. said today it will purchase Storage Technology Corp. for $4.1 billion in a deal that would create a network computing and data management company which would have had combined revenue of more than $13 billion over the past year.
Under the deal approved by both boards, Sun would pay $37 per share in cash for Storage Technology shares. The $4.1 billion deal value includes the assumption of employee stock options.
Storage Technology surged 17.8 percent, or $5.56, to $36.79 in premarket activity. Sun Microsystems shares closed Wednesday at $3.90 on the Nasdaq, and rose 18 cents, or 4.6 percent, to $4.08 in premarket activity.
StorageTek, based in Louisville near Boulder, Colorado, makes tape drives and network management and backup software for businesses and government agencies.
Sun said it expects the acquisition to add to operating profit in the first 12 months following the closing.
“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 rationalize their datacenter 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.
Following completion of the proposed transaction, which is expected to occur in late summer or early fall of this year, StorageTek will become fully integrated within Sun’s organization.
