Tandberg Data acquires Exabyte

By | August 30, 2006

Tandberg Data, the only European data storage company that manufactures tape drives, tape automation, tape libraries and disk sub systems, today announced the acquisition of the US data storage company Exabyte Corporation for $28 million. The merged company, with an expected revenue of $215 million for 2006, will be the second largest player in data storage (OEMs not included).

Tandberg Data signed late last night an agreement to acquire all assets, rights and certain liabilities in the US data storage company Exabyte Corporation. Tandberg Data will pay $28 million, which is distributed among a number of Exabyteâ„–s creditors. $22 million will be paid in cash at closing. The final closing of the agreement is expected to take place in the fourth quarter 2006.

Jointly, Tandberg Data and Exabyte will be able to offer a broad range of advanced storage and automation systems to small and medium-sized enterprises which want to protect ever more commercially-crucial business information. The merged company will have a strong position in the USA and Asia.

“Tandberg Data and Exabyte complement each other well in terms of both products and markets, and combined will jointly take a clear second place,”

commented Tandberg Data chief executive, Gudmundur Einarsson.

“We will double our size and step up among the major technology companies listed on the Oslo Stock Exchange. A more advantageous size will give us better opportunities to build something even stronger, to the benefit of customers and shareholders.

“We are pleased to have reached an agreement for the combination of Exabyte and Tandberg Data,” noted Tom Ward, CEO at Exabyte.

“The complementary strengths of the two companies in the various geographic markets around the world will result in a truly global competitor in the storage industry. In addition, the combined product portfolios of the two companies will provide our customers with the full range of state-of-the-art, cost effective products and technologies to meet their needs. Finally, the operational synergies resulting from the combination will allow the new company to operate from a position of financial strength and stability in the future.”

Two leading data storage specialists have now joined forces to create a major technology company. The merger is likely to yield cost synergies of approximately $10 million with effect from the first quarter of next year.

Additionally, Tandberg Data expects to take out income synergies that have yet to be quantified.

“This merger opens opportunities that the two companies on their own could not have succeeded in realising in the short term,” Mr Einarsson observed.

“That´s important at a time when the computer industry is characterised by a powerful process of consolidation. We find that our dealers constantly want more complete answers to data security. With Exabyte´s technology, we´ll be able to offer better solutions for data storage and automation.”

To finance the acquisition, Tandberg Data will issue a $35 million bond loan, which has been fully committed by Cyprus Capital. The bond loan will be structured as a senior secured USD loan; will carry a coupon of 11.50% p.a. payable in arrears, and mature in 2010, with a one-time instalment of $5 million maturing six months after disbursement. The loan may be redeemed partially or in full by Tandberg Data in the period from and including the first anniversary of disbursement to the maturity at nominal value plus an agreed mark-up.

Parts of the loan can also be redeemed during the first year if Tandberg Data carries out an equity issue, in which event the coupon can be reduced down to 10.15% according to an agreed scale. The loan will be employed to repay the two existing bond loans issued by Tandberg Data, to finance the acquisition and for other corporate purposes.

Cyprus Capital requires that it be granted 2,500,000 warrants, which each give the right to subscribe to a share at an exercise price of NOK 9.00 the first four years of the term of the loan.

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