nStor merges with Andataco
By Zachary Shess
Further consolidation in the RAID market continued last month when nStor Technologies announced it will acquire 75% of Andataco Inc. stock from its president, David Sykes. Under the terms of the agreement, nStor will also purchase from Sykes a note for $5.196 million owed him by Andataco. He is expected to remain as president of the San Diego-based vendor.
The announcement continues a comeback toward profitability for the Lake Mary, FL-based nStor, which began with the appointment of president and CEO Larry Steffann in June 1998. nStor then slashed unsuccessful and low-end products and brought its Adaptive RAID for NT technology and AdminiStor storage management suite to market while broadening its Fibre Channel storage subsystem line.
The activity has led to a significant OEM deal with Silicon Graphics, announced last week, and an undisclosed amount of equity financing. This capital infusion enabled the smaller nStor ($15 million in revenues through the first three fiscal quarters of 1998) to acquire the majority of the $77.5 million Andataco. Under the terms of the deal with SGI, nStor will supply RAID subsystems for SGI`s line of Intel-based workstations.
The merger, which is contingent on nStor raising the necessary capital, is expected to close by the end of this month. Once finalized, the nStor and Andataco product names and operations are expected to remain intact. No layoffs are expected.