Xyratex to Acquire nStor
28 Juli 2005 - 4:00PM
PR Newswire (US)
Xyratex to Acquire nStor Significantly Broadens Opportunities for
Xyratex in the Entry Level RAID Market HAVANT, England and
CARLSBAD, Calif., July 28 /PRNewswire-FirstCall/ -- Xyratex Ltd
(NASDAQ:XRTX) and nStor Technologies, Inc (AMEX:NSO), today
announced that they have signed a definitive merger agreement
providing for Xyratex to acquire all of the outstanding shares of
nStor in a transaction valued at approximately $21.2 million. The
boards of directors of both companies have approved the merger
agreement. For Xyratex, the acquisition of nStor augments the
company's already strong lineup of storage technology and platform
solutions. The acquisition of nStor will combine Xyratex's
industry-leading expertise in high volume, high availability
storage system enclosure design with nStor's extensive experience
and value-added RAID Controller and Storage Solution software
providing a highly scalable set of offerings to meet customer
requirements. Under the terms of the merger agreement, Normandy
Acquisition Corp, an indirect wholly owned subsidiary of Xyratex
Ltd, will make a tender offer to purchase all of the outstanding
shares of nStor's common stock at a cash purchase price of $0.105
per share. The tender offer will be subject to certain conditions,
including the tender of at least 88.1% of nStor's shares of common
stock. The tender offer is expected to commence on or about August
3, 2005 and is expected to be followed by a second step merger in
which those shares not tendered will be converted into the right to
receive the same $0.105 per share in cash. Stockholders
representing approximately 37.5% of the outstanding shares have
entered into support agreements under which they agreed, among
other things, to tender their shares and, if necessary, to vote
their shares in favor of the proposed merger. "This proposed
acquisition will strengthen Xyratex's proven technology in the
critical area of Entry Level RAID controller technology," said
Steve Barber, CEO of Xyratex. "This emerging high growth segment
presents an exciting new opportunity for Xyratex. We believe that
the combination of Xyratex's existing intellectual property base
with nStor's Raid and software technology enables us to extend our
leadership position and acquire new customers and positions us well
for future growth." Xyratex defines the Entry Level RAID Storage
Systems market segment to cover all External Storage Systems which
have an end user price band up to $15,000. Using data provided by
IDC, Xyratex estimates that the market opportunity for this segment
is approximately $1.9 billion in 2005 growing to over $6.3 billion
in 2008. nStor has invested significantly to develop its
leading-edge low cost storage systems product range. This includes
Storage Solution technology and dual active RAID controllers
developed around a stable firmware core. A key element of Xyratex's
business strategy is to expand its technology base to incorporate
more captive RAID controller technology into its product offerings
within the External Storage Systems market. "This business
combination gives us the opportunity to significantly expand our
activities within the storage market and complement our global
strategy to provide cost effective storage solutions to OEM and
Solutions Integrator customers," said Todd Gresham, CEO of nStor.
"We believe moving forward with Xyratex will allow us to fully
leverage our market and technology competencies to bring additional
value to our combined customer sets." A conference call to discuss
the acquisition of nStor will be broadcast live via the internet at
http://www.xyratex.com/investors on Friday, July 29, 2005 at 5:30
a.m. Pacific Time/8:30 a.m. Eastern Time. You can also access the
conference call by dialing (866) 543-6408 in the United States and
(617) 213-8899 outside of the United States, passcode 67763097. The
press release will be posted to the company web site
http://www.xyratex.com/. A replay will be available through August
5, 2005 following the live call by dialing (888) 286-8010 in the
United States and (617) 801-6888 outside the United States, replay
code 41444498. Additional Information This press release is neither
an offer to purchase nor a solicitation of an offer to sell shares
of nStor. nStor stockholders are advised to read the tender offer
statement and the solicitation /recommendation statement regarding
the acquisition referenced in the press release, which will be
filed with the Securities and Exchange Commission upon the
commencement of the tender offer. The tender offer statement
(including an offer to purchase, letter of transmittal and related
tender offer documents) and the solicitation/recommendation
statement will contain important information which should be read
carefully before any decisions are made with respect to the offer.
nStor stockholders may obtain a free copy of the tender offer
statement and the solicitation/recommendation statement when they
are available and copies of other documents filed by Xyratex and
nStor with the SEC at the SEC's web site at http://www.sec.gov/.
The tender offer statement and the solicitation/recommendation
statement and these other documents may also be obtained by nStor
stockholders without cost to them from Xyratex and nStor. Safe
Harbor Statement This press release contains forward-looking
statements that involve risks and uncertainties. These
forward-looking statements include statements regarding future
results or financial performance of Xyratex, including statements
relating to the acquisition of nStor, strengthening Xyratex's
position in the storage market and enabling Xyratex to build future
storage and disk cleaning products. Such statements are just
predictions and involve risks and uncertainties such that actual
results and performance may differ materially. Factors that might
cause such a difference include successful integration of NStor's
assets and employees into Xyratex, building future disk cleaning
products, Xyratex's inability to compete successfully in the
competitive and rapidly changing marketplace, failure to retain key
employees, cancellation or delay of projects and continued adverse
general economic conditions in the U.S. and internationally. These
risks and other factors include those listed under "Risk Factors"
and elsewhere in Xyratex's Annual Report on Form 20-F as filed with
the Securities and Exchange Commission (File No. 000-50799). In
some cases, you can identify forward-looking statements by
terminology such as "may," "will," "should," "expects," "intends,"
"plans," "anticipates," "believes," "estimates," "predicts,"
"potential," "continue," or the negative of these terms or other
comparable terminology. Although we believe that the expectations
reflected in the forward-looking statements are reasonable, we
cannot guarantee future results, levels of activity, performance or
achievements. About nStor Headquartered in Carlsbad, Calif., nStor
Technologies, Inc. is a developer of data storage solutions that
are ideally suited for both large enterprises as well as small to
mid-sized businesses. nStor's flagship controller technology and
StorView software form the foundation for the OneStor and NexStor
family of turnkey solutions that support Microsoft Windows, Linux,
UNIX and Macintosh operating environments. Designed for
storage-intensive environments and mission-critical applications,
nStor's products are offered in various architectures including
Fibre Channel, SCSI and SATA and are focused on addressing
customers' business needs and applications. nStor markets its
storage solutions through a global network of OEM partners and
systems integrators. For more information, visit
http://www.nstor.com/ . About Xyratex Xyratex is a leading provider
of enterprise data storage subsystems and storage process
technology. Xyratex designs and manufactures enabling technology
that provides OEM and disk drive manufacturer customers with data
storage products to support high-performance storage and data
communication networks. Xyratex has over 20 years of experience in
research and development relating to disk drives, storage systems
and high-speed communication protocols. Founded in 1994 in an MBO
from IBM, and with headquarters in the UK, Xyratex has an
established global base with R&D and operational facilities in
Europe, the United States and South East Asia. DATASOURCE: nStor
Technologies, Inc; Xyratex Ltd CONTACT: Lisa Hart of nStor
Marketing & Alliances, +1-760-683-2516, ; or Investor
Relations, Brad Driver of Xyratex, +1-408-325-7260, ; or Public
Relations, Curtis Chan of CHAN & ASSOCIATES, INC.,
+1-714-447-4993, , for Xyratex Ltd Web site: http://www.nstor.com/
http://www.xyratex.com/ http://www.xyratex.com/investors x
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