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nStor shells out $10 million telco management company

nStor Technologies intends to pay $10 million for a telecommunications management and consulting company. Though the company is being tight-lipped on the details, it did say it expects the deal to bring an immediate cash return.

In a hush-hush deal, data storage vendor nStor Technologies Inc., has let slip its intentions to buy an unnamed telecommunications management and consulting company for an estimated $10 million.

Headquartered in San Diego, Calif., nStor designs direct-attached and SAN-ready storage enclosures and storage management software.

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The company is confident that the acquisition will allow its Fibre Channel and SCSI products to penetrate previously untapped vertical market sectors.

Storage enclosures are the name of the game for nStor. The company specializes in Fibre Channel and SCSI and its storage boxes feature 12-bay enclosure technology that has integrated dual RAID controllers in a 2U form factor, and can scale up to 22T Bytes behind a single direct-connect host connection, nStor said.

An nStor spokesperson said that the name of the telco will not be disclosed until the deal is done.

Jack Jaiven, vice president and treasurer, nStor, said the company expects to sign a deal shortly.

"Assuming we choose to complete the transaction, we feel that the acquired company's customer base will be a significant source of new business for our computer storage operation," said Jaiven. "In addition, we expect the acquired company to operate on a positive cash flow basis immediately."

The company said there are no foreseeable integration issues because the acquired business will operate as a separate business from the existing nStor operation.

H. Irwin Levy, Chief Executive Officer of nStor Technologies, stated that the acquisition will result in an immediate increase in nStor's net worth, and improve the company's liquidity, earnings, and cash flow.

Levy stated that the acquisition will most likely be finalized this week.

Mike Karp, senior analyst for Boulder, Colo.-headquartered Enterprise Management Associates Inc., said a lot of storage networking companies are coming to the conclusion that storage is being deployed out into the network.

"A lot of companies are [realizing] that the network will become the ubiquitous backbone for everything," said Karp.

He added that it makes a ton of sense for a storage company to acquire the existing infrastructure of a telecommunications company, particularly if the network infrastructure is IP-based.

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