Boulder-based storage tape maker Exabyte Corp. said Wednesday it would sell its assets to Tandberg Data ASA for $28 million.
Exabyte has struggled financially in recent years as the tape- storage industry has suffered in the face of competition from new technologies such as disk- based storage.
In June, the company said it had enlisted an investment-banking firm – St. Charles Capital LLC of Denver – to help it review “strategic business alternatives, including the merger or sale of the company.”
Tandberg Data, based in Oslo, Norway, also sells tape-storage equipment but is primarily focused on European and Asian markets.
The acquisition will allow Exabyte to pay off outstanding debt of about $22.5 million. The deal is expected to close in late October.
But the move may not be enough for a shrinking tape-storage industry, analysts said.
“It’s a bail-out scenario for Exabyte,” said Enterprise Strategy Group analyst Brian Babineau. “Cost-cutting initiatives exist, but because they sell into a market that’s not growing – the tape market is flat – we may be just switching deck chairs on the Titanic.”
Founded in 1985 by a group of storage veterans, including Storage Technology Corp. co- founder Juan Rodriguez, Exabyte has 170 employees. In 2000, Exabyte had more than 1,000 workers worldwide. Tandberg has about 190 employees.
Exabyte officials said employees would be offered “reasonably equivalent” positions with Tandberg.
“The current plan is to keep operations in Boulder,” said Kelly Beavers, vice president of product marketing for Exabyte. “It’s very early in this process. There’s a lot of hard work and planning that needs to take place.”
Tandberg plans to use the merger to grow its U.S. revenues. In return, Exabyte-branded products will be heavily marketed overseas, Beavers said.
“We see this as a very good fit,” he said. “Where Exabyte is weak, Tandberg is strong and vice versa.”
For the second quarter of 2006, Exabyte reported revenues of $19.5 million.
St. Charles Capital contacted 40 potential buyers, and of those, 12 were interested in Exabyte, Beavers said. It narrowed that number down to four, including Tandberg.
“Tandberg offered the greatest opportunity in terms of the benefit to our users and had the least impact on creditors,” Beavers said.
Staff writer Kimberly S. Johnson can be reached at 303-954-1088 or kjohnson@denverpost.com.
