Adaptec, a leading designer of various controllers, announced today that on May 8, 2010, it signed a definitive agreement with PMC-Sierra to sell to PMC certain assets and for PMC to assume certain liabilities connected with the Company's data storage hardware and software business for approximately $34 million in cash.
"Over the last two years, the Adaptec’s stockholders made abundantly clear that they demand a change in the direction of the company to realize value from the company's historical operating units. This transaction with PMC-Sierra, which represents the sale of a small portion of the company's total assets, represents that change and continues the process of moving the company away from its previous unprofitable identity as a 'pure-play' technology company," said Jack Howard, chairman of the board of Adaptec.
Following the sale to PMC-Sierra, the Adaptec will retain its Aristos ASIC technology business, certain real estate assets, more than 200 patents, and approximately $400 million in cash and marketable securities.
Since 2009, Adaptec has set forth plans to re-deploy the substantial amount of liquid assets and unlock the tax benefits of the Adaptec’s net operating losses to maximize value for all stockholders. Following this transaction with PMC-Sierra, Adaptec’s board of directors plans to explore all strategic alternatives to deploy the proceeds of the sale and the company's other assets, which may include stock buybacks, special cash dividends, future acquisitions and other actions to redeploy capital. Additionally, Adaptec will, as previously announced, continue to consider its options related to its Aristos ASIC technology business, remaining patents and real estate holdings.
The board of directors of the company retained Blackstone Advisory Partners L.P. (Blackstone) in June of 2009 to assist Adaptec in analyzing and exploring strategic alternatives, and launched a broad auction sale process for the Company's operating assets in September of 2009. Following a thorough sale process, the board determined that the transaction with PMC was in the best interest of the company's stockholders.
The transaction, which is not subject to the waiting period under the Hart-Scott Rodino Act or to Adaptec shareholder approval, is scheduled to close in approximately thirty days, pending the satisfaction of certain customary closing conditions.