Nstor (AMEX:NSO)
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Xyratex to Acquire nStor
Significantly Broadens Opportunities for Xyratex in the Entry Level RAID Market
HAVANT, United Kingdom, 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/.
Contacts:
nStor Marketing & Alliances
Lisa Hart
Tel: +1 (760) 683-2516
Email:
Website: 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.
Contacts:
Xyratex Investor Relations
Brad Driver
Tel: +1 (408) 325-7260
Email:
Website: http://www.xyratex.com/
Xyratex Public Relations
Curtis Chan
CHAN & ASSOCIATES, INC.
Tel: +1 (714) 447-4993
Email:
DATASOURCE: Xyratex Ltd
CONTACT: Lisa Hart, Marketing & Alliances of nStor, +1-760-683-2516,
; or Brad Driver, Investor Relations of Xyratex,
+1-408-325-7260, ; or Curtis Chan of CHAN & ASSOCIATES,
INC., +1-714-447-4993, , for Xyratex Ltd
Web site: http://www.xyratex.com/