Taking a cue from its competitors, Seagate Technology Inc. said Friday it will acquire privately-held XIOtech Corp., an Eden Prairie, Minn.-based storage area network (SAN) vendor, for about $360 million in common stock.
Seagate, located here, is the last major hard-disk-drive vendor without its own storage system offering after competitors Quantum Corp., Western Digital Corp. and Maxtor Corp. acquired network-attached storage (NAS) vendors in 1999.
Once the acquisition is complete, Seagate expects to move XIOtech's technology to its own OEM and distributor customer channels, said a Seagate spokesman. This might include either stand-alone XIOtech products or XIOtech technology, which Seagate's customers could add to their own products, he said.
While Seagate has been later than its competitors in the storage systems market, the XIOtech acquisition is more of a strategic move than those made by other hard-disk-drive vendors, said the spokesman. Seagate has been offering Fibre Channel-based drives because of their importance to SANs, he said. XIOtech will provide the company core SAN technology, including intelligent storage technology, he said.
The acquisition will be good for XIOtech and its customers, said Dick Blaschke, executive vice president of marketing for the company. The Seagate relationship will help in branding and will provide the resources to accelerate product development, he said.
Current XIOtech management is expected to remain in place, and no job reductions are planned, said Blaschke. "On the contrary, there will be a massive acceleration of staff," he said. "Seagate is interested in much of our technology, especially virtualization."
Seagate disclosed the acquisition after trading on the New York Stock Exchange closed on Friday. The company's stock rose 25 cents to reach $40 on Monday.