Good morning,Maxtor Corporation (NASDAQ: MXTR) and Quantum Corporation today announced a definitive agreement to combine Maxtor and Quantum HDD, Quantum's Hard Disk Drive Group, in an all-stock transaction that will create the world's leading disk drive company. Quantum's HDD stockholders will receive 1.52 shares of Maxtor common stock for every share of HDD common stock they own. Based on the current market capitalizations of Maxtor and Quantum HDD, the transaction is valued at approximately $2.3 billion.To be named Maxtor Corporation, the combined company will be led by Mike Cannon, Maxtor's current president and chief executive officer. At closing, on a pro forma basis, the company will have a combined ship rate of more than 50 million hard drives annually for use in a broad range of desktop personal computers, Intel-based servers, and consumer electronics applications. In addition, Maxtor's Network Systems Group, which is currently shipping a family of network-attached storage (NAS) products under the MaxAttach brand, will be part of the combined company.Click on the news link at the top of this page to read the full press release.Keep Foolish and Prosper,Spirit PS: When your company falters-- because sooner or later it will -- how well you evaluate it's ability to get back up and win will largely determine whether you beat or lose to the market's average return. In that spirit of analysis, we've strung together some real companies that have faced recent difficulties. Check out the Special we have on Big Company Mistakes by Tom Gardner and Peter Psaras at; http://fool.com/specials/2000/sp000928.htm
This does not include DSS, but any thoughts on the impact of the deal, if any, on DSS?
Concerning the merger with Maxtor, this seems like a really good deal for Michael Brown. The Quantum stockholders have been very upset with him for over a year now concerning stock price being in the dumps and missing his earnings projections. As a result of this Maxtor merger he gets a spot on the board of directors. Looks like this may give him something to do if Quantum dumps him. In addition, you didn't mention that Maxtor and Quantum are competitors in Network Attached Servors (NAS). Approximately a year ago Quantum bought SNAP!, the original manufacturer of the hard disk based network attached server and made it a division of Quantum. One of the really good things about this merger is that it took a unique product and provided an opportunity for the division to buy its drives cheap. This was essential to making a good profit. Now that Quantum has sold its disk drive division, is there an agreement to continue to sell drives to the SNAP division as cheaply? Again, Maxtor and Quantum are in direct competition in this new area of storage. It doesn't seem wise that Maxtor would contribute to the competitiveness of SNAP.
As an investor in DSS but not HDD, what are the prospects for DSS? After reading the company(s) annual report a few months ago it seemed that although these are two separate companies, they are joined in very intricate ways.I'm pleased with my investment in DSS and like the company and what I have read about it has been positive.Are there any more experienced Fools out there that can shed some light on a new Fool convert?
As a DBA for HP3000 and 9000 systems, I find our DLT drives to be quite efficient. Although these drives are HP manufactured, I don't think there is (to my knowledge) any better backup device that would compare. I am also an investor in Quantum DSS, because of the fact that I know how DLT works, and it's effect on disaster/recovery. From an administration standpoint, if Quantum's HDD division produces reliable, cost-effective hard drives for Desktop User/Networks, the next logical step would be to purchase a device to backup the drives. Quantum needs the hard drives to become accepted in the market place, therefore, allowing their DLT to follow immediately right behind it. This is the tie between HDD and DSS.All hard drives fail. And by human nature, we purchase products by name recognition, reliablity, and cost.any thoughts?
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