Quantum to buy ATL

Posted on August 01, 1998

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Quantum to buy ATL

By Zachary Shess

Next month, Quantum is expected to complete its acquisition of tape library manufacturer ATL Products, a move seen by industry observers as a solid plan to broaden Quantum`s automated tape business and gain market share in the higher-end sector of the library market. ATL provides mid-range to high-end tape automation libraries. Under the agreement, Quantum will make an all-stock transaction valued at approximately $300 million. If the deal is approved, the Irvine,

CA-based ATL will become a wholly owned subsidiary of Quantum. The combination of the two companies is "a natural progression" of an existing OEM relationship under which ATL marketed and sold Quantum`s automation products. Quantum`s tape automation product line consists of entry-level autoloaders and libraries that typically did not exceed 1TB.

Robert Amatruda, senior analyst with International Data Corp., a market research firm in Framingham, MA, says the move is an excellent strategic decision that takes Quantum into a lucrative market.

"Quantum wants to realize some of the tremendous growth going on out there on the automation side. They`re mainly seeing revenue from the drive side, but there`s all this value-added revenue that they`re not seeing." Amatruda believes Quantum`s primary challenge will be to reassure its large drive buyers, such as StorageTek, that ATL will not receive preferential treatment in pricing and supply.

Quantum officials said they expect ATL to retain its product names upon approval of the acquisition. Kevin Daly will retain his post as chairman, president and CEO of ATL. No layoffs are anticipated.

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