Struggling storage vendors companies Overland Storage and Tandberg Data today confirmed their plans to combine and try to turn two money-losing businesses into a winner. The companies today said they have reached agreement for Overland to acquire Tandberg in an all-stock transaction.
No purchase price was given, but Tandberg will become a wholly owned subsidiary of Overland. Overland CEO Eric Kelly and CFO Kurt Kalbfleisch will remain in their current roles and COO Randy Gast, Overland’s senior VP of worldwide operations and services, becomes COO of the new company. Cyrus Capital, which bought Tandberg out of bankruptcy in 2009, will get two of seven board positions.
On a conference call to discuss the deal, Kelly said the merged companies had more than $100 million in revenue last year – with around $60 million coming from Tandberg – and combining them provides “a clear path to profitability.”
Both companies have struggled on their own. Along with Tandberg’s bankruptcy, Overland has been losing money for years and its fortunes took a steep downturn after it lose at tape OEM deal with Hewlett-Packard in 2005 that accounted for most of its revenue. Overland has been trying to rebound as a storage systems company since then, although it still tapes tape drives and libraries to go with SAN and NAS systems and disk backup.
Tandberg also sells tape libraries and drives, RDX removable disk, disk backup and low-end NAS. Kelly pointed out that Tandberg’s tape and NAS products are sold into a lower-end of the market than Overland’s, and there is little or no competing products.
“The product lines are complementary with minimal overlap,” he said.
Overland executives disclosed in May that they were discussing a merger with Tandberg. Kelly said he hopes the shareholder vote needed to close the deal will come by the end of the year.