Mylex would become a fully owned subsidiary of IBM, still selling its products to all who want them, rather than absorbed by the blue cape.
Wonder what happens to the stock price in a situation like this. Deal won't be consummated probably for several months. With the purchase price set at $12/share, does it make much sense to continue holding until the deal is settled? I'm thinking of opportunity costs. Is there a market for current shares? I bought more this morning on a hunch earnings would be worth the purchase, not expecting a buyout. Never been in this situation.
"ARMONK, N.Y., Jul 27, 1999 (BUSINESS WIRE via COMTEX) -- IBM today announced that it has agreed to acquire Mylex Corporation (NASDAQ:
MYLX), a leading developer of technology for moving, storing, protecting and managing data in desktop and networked environments.
"IBM will pay $12 per share for each outstanding share of Mylex common stock. Based on the number of outstanding shares, the transaction is valued at approximately $240 million. Upon completion of the acquisition, which is subject to regulatory and other approvals, Mylex will become a wholly owned subsidiary of IBM.
"Through this acquisition, IBM will strengthen its Technology Group's efforts to deliver "one-stop shopping" to storage customers in the OEM (original equipment manufacturer) market and broaden IBM's data storage offerings. Leveraging Mylex technologies will enable IBM to meet the growing storage demands of customers as they transition themselves into e-businesses and seek to manage and exploit massive new levels of data.
"Following completion of the acquisition, IBM will use Mylex technologies with IBM's existing hardware and software products to provide customers with the most complete line of storage solutions in the industry. Mylex designs and manufactures cost-effective and high-performance RAID adapters and external controllers for storage products. RAID, or redundant arrays of independent disks, can provide higher performance and enhanced data security by effectively grouping several disks into a single system.
"Mylex products will continue to be sold to distributors, value-added resellers (VARs) and system integrators for the UNIX and Windows NT platforms, as well as OEM customers.
"The demands of e-business and an increasing number of data-intensive applications are fueling the growth of the storage business, at all levels," said Ron Kilpatrick, general manager of IBM's Storage Systems Division. "Customers are demanding storage and data management solutions that can handle this massive new workload. The combination of Mylex's technology and intellectual property, along with IBM's capabilities, represents significant growth opportunities."
"IBM will help to bring our line of RAID controllers to a broader customer base than ever before," added Al Montross, president and CEO of Mylex. "IBM's technology will enhance our products and allow us to address new opportunities, and its global capabilities and industry stature will help to expand Mylex's technology."
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