ADIC Invests In Overland

Advanced Digital Information Corp., Redmond, Wash., filed notice with the SEC on Friday that the company paid $9.5 million for a 9.3 percent share of the San Diego-based Overland.

ADIC manufactures midrange and enterprise-class tape automation products, disk-based backup arrays and storage management software, while Overland focuses on entry-level and midrange tape automation. Overland also has a disk-based backup appliance family and just last week acquired Zetta Systems, a developer of storage software that Overland plans to use to develop its first line of primary storage arrays.

Mike Fanelli, western regional manager at SSI hubcity, a Metuchen, N.J.-based Overland solution provider, said he was intrigued and confused by the possibility of the two getting together. "I don't understand why," he said. "ADIC has always touted that they are the leader in this space."

If nothing else, the continuing spate of acquisitions in the storage industry will simplify solution provider product lines, said Fanelli. "My line card gets easier to print," he said. "And there's less training involved."

In the Schedule 13D form filed with the SEC, ADIC referred to the possibility of the company acquiring Overland, stating: "ADIC purchased the Shares based on its belief that Overland's current enterprise value and corresponding market prices for the Shares represent an attractive investment opportunity, as well as a possible opportunity to facilitate strategic consolidation within the data-storage industry.”

ADIC executives met with Overland President and CEO Christopher Calisi to discuss Overland's business and future plans and the two companies signed a confidentiality letter about the possible transaction at the time, according to the SEC filing.

The companies met again Thursday, at which time ADIC told Calisi about its purchase of Overland shares and to discuss a possible business combination. ADIC in the 13D said that there may be more discussions in the future, but that there is no assurance that the two companies will combine now or in the future.

Neither ADIC nor Overland officials would comment on the deal. However, an ADIC spokesperson said that ADIC has in the past invested in storage partners and competitors such as StorageTek and Quantum.