Quantum restructures, acquires Benchmark

Posted on October 01, 2002

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By Heidi Biggar

Quantum last month announced a major restructuring effort with the hope of steering the company toward profitability by the end of its fiscal year. The news came a week after Quantum announced plans to acquire Benchmark Storage Innovations, a vendor of low-cost DLTtape drives.

Quantum, which licensed technology to Benchmark several years ago, currently has a 20% investment interest in Benchmark. The acquisition is a stock/cash deal valued at nearly $55 million.

Quantum's restructuring will reportedly occur in two phases over the next two quarters and will affect its business groups (i.e., its DLTtape Group and Storage Solutions Group) and corporate functions. The company expects to eliminate about 1,100 jobs in the first phase.

"A key part of our strategy is to strengthen our tape business for the long term," says Andy Grolnick, vice president of marketing in the DLTtape Group. "[By acquiring Benchmark] we can come up with a more coordinated road map and leverage each other's efficiencies."

The company plans to further reduce costs by consolidating development sites for its disk-based backup and tape automation efforts and by centralizing support functions.

Quantum will integrate Benchmark's ValuSmart line of tape drives, media, and autoloaders into the larger DLTtape family and its Storage Solutions Group. The company plans to maintain Benchmark's headquarters facility in Boulder, CO, but will likely eliminate jobs as the two workforces are combined.

Quantum has 3,100 employees worldwide, with the bulk of those located at its corporate headquarters in Milpitas, CA. Benchmark has approximately 120 employees and claims to have shipped more than 200,000 tape drives since its launch in 1999. Benchmark outsources its manufacturing to Mitsumi Electric and Beyonics Technology.


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