StorageTek hires advisers to explore options
8:18 a.m. PDT Friday, October 15, 1999
NEW YORK (Reuters) - High-capacity data storage
equipment maker Storage Technology Corp. said Friday it hired investment bankers to help the company review alternatives that could include a sale of the company.
The company, known as StorageTek, said in a statement it hired Goldman, Sachs & Co. and McKinsey & Company to look at the possibility of financial restructuring, acquisitions, divestitures, spin-offs, and business combinations.
The deal comes just two days after StorageTek's stock slumped nearly 20 percent when the company announced it expected its third-quarter profits and revenues to fall significantly below Wall Street estimates.
It said sales of storage disk and mainframe tape back-up products declined from a year ago, while the sales of its storage management software and services and other tape products grew. The products are used in offices to store the huge volumes of corporate data generated by computer and the growing use of the Internet.
Analysts surveyed by First Call/Thomson Financial had been forecasting StorageTek's share earnings to reach between 30 cents and 33 cents, but sharply revised their estimates to 8 cents after the company said it expected results below 10 cents.
In September, a group of StorageTek shareholders said it was ''extremely disappointed'' in the financial performance of the Louisville, Colo.,-based company and urged a sale or merger.
StorageTek's shares were up 1/2 to 15-1/2 shortly after the open Friday on the New York Stock Exchange |
