Here is a post from HDD Yahoo thread, which has the right angle on this, IMO. HDD is folding Maxtor into itself, but taking the Maxtor corporate shell and, of course, Mike Cannon: messages.yahoo.com It is all so much simpler that way.
The NAS conflict suggests that another deal is being worked out, this time for either all of DSS or for Snap by itself. If Snap is flying off of Dell's shelves (they just signed a distribution agreement with DSS, and have it advertised on the front page of their web site), then they might well be interested in the whole thing. It would fit their sales model pretty well, since it is a "snap" to set up and run. And their clout on drive buying will help them enormously, needless to say. Would they also buy the tape drive unit and the library unit? I'm not as sure of that, but there are three components to DSS, each which could be interesting to a company like Dell, CPQ, Sun, or some other large vendor getting into storage. As has been well advertised, people make projections on future spending are suggesting that up to 85% of IT dollars will go to storage in one way or another (purchase, support and maintenance, time) within the next 3 or 4 years, and a lot of people are jumping on the bandwagon. I wouldn't object to a DSS takeover, but hope it would be for at least 3 to 3.5x revenue, given the growth prospects of its businesses (especially if SDLT is in fact as robust as DSS management suggests it is).
BTW, Yahoo says that HDD had $585 million at the end of last Q. Probably more than $600m now. So Maxtor is buying the business part of it (including, of course, the MKE relationship) for less than $600m. Still not quite as good as Silver Lake/Texas Pacific, which is getting the drive business for almost nothing, but a pretty good deal, I'd say.
Sam |
