Seagate Signs Definitive Agreement to Acquire Optical Technology Developer Quinta
Designed to Substantially Increase Disc Drive Storage Capacity
SCOTTS VALLEY, Calif., July 2 /PRNewswire/ -- Seagate Technology, Inc. (NYSE: SEG) today announced the execution of a definitive agreement and plan of reorganization to acquire Quinta Corporation, a developer of ultra-high capacity disc drive technologies, including a new optically assisted Winchester (OAW) technology. Quinta's unique OAW development activity is designed to integrate optical, magnetic and telecommunications technologies for the purpose of building a new class of high capacity, cost-effective disc drive storage devices.
By entering into this agreement, the companies' objective is to meet a future increase in demand for affordable, high capacity, high performance on-line storage. Quinta believes that its technology will be well-suited for a growing number of data storage-intensive applications including Internet servers, Storage Area Networks (SANs), data warehouses, corporate networks and advanced audio/video applications.
Seagate currently holds a minority interest in Quinta. The transaction has been approved by the Board of Directors of both companies, but is still subject to normal conditions to closing, including approval by the shareholders of Quinta and regulatory approvals. Pursuant to the agreement, the shareholders of Quinta, other than Seagate, will receive cash payments aggregating $230 million upon closing of the transaction and will be eligible to receive, upon the achievement of certain product development and early production milestones, additional payments aggregating $95 million. Seagate anticipates that it will incur a charge to operations in the quarter in which the transaction closes of approximately $180 million to $215 million in connection with the write-off of in-process research and development.
"Seagate is a leader in introducing leading edge storage technologies to the marketplace," said Alan Shugart, Seagate's president, chairman of the board, and chief executive officer. "The integration of Seagate's technological leadership and innovation with Quinta's is an ideal combination to develop concepts and solutions shaping the future of the data technology industry."
"Quinta's development activity in optically assisted Winchester technology represents important progress in the evolution of high-performance online storage," said Steven P. Kitrosser, president and chief executive officer of Quinta Corporation. "By combining traditional storage technologies with significant advancements from outside the data storage world we are creating what we believe will be an exciting new growth path for the industry. We are pleased to join Seagate and gain access to the wealth of talent and leadership found in the world's largest manufacturer of disc drives and related components. We believe the synergy between our two companies will catalyze the development and implementation of optically assisted Winchester technology and we are excited about the possibilities ahead."
Quinta's OAW technology is actually a system that will be designed for potential implementation across a range of hard disc drive products. At the heart of OAW is a new head design that will integrate state-of-the-art optical elements into a Winchester-style flying head. The lens, utilizing conventional optics, will focus a laser beam onto the media to assist in the writing, reading and tracking processes. The OAW also includes a unique fine servo and advanced light delivery system which will help to support the use of multiple heads. The end result is a system that will be able to support very high areal density recording and reading on multiple discs. Quinta has applied for a number of significant patents related to storage technology and expects to apply for others.
OAW technology is designed to offer significant benefits in the area of head/disc interface. With the head's nominal flying height above the media at 15 micro-inches, the chance of unwanted head/disc contact is minimized. A flying height advantage can be maintained through future generations of higher capacities, thus creating another growth path for the industry.
Quinta's development efforts have been aided by teaming with a strong group of suppliers including Read-Rite Corporation of Milpitas, CA. In addition to traditional data storage technology suppliers, Quinta is also working with several companies whose technologies are new to the data storage industry. "Quinta is providing the opportunity for this new group of suppliers to become significant vendors to the industry, as well as making them more competitive in their own core industries," added Kitrosser.
Quinta's headquarters are in San Jose, California where it is establishing an initial manufacturing facility. The company's founders share more than 80 years of combined experience in the data storage industry and its employees bring strong backgrounds in hard disc drives, optical storage, and other key technologies. Quinta's home page address on the World Wide Web is http://www.quinta.com.
Seagate Technology, Inc. is a leading data technology company providing products for storing, managing and accessing digital information. Seagate develops and manufactures some of the industry's most advanced information technology, including disc and tape storage devices, magnetic recording heads and media, precision motors, microelectronics, and data access and management software. With $9.0 billion in revenue, operations in 22 countries and over 100,000 employees worldwide, the Scotts Valley, CA-based company is the world's largest manufacture of disc drives and related components and one of the globe's largest industrial corporations. Seagate's home page address on the World Wide Web is http://www.seagate.com.
Certain statements in this communication are forward-looking statements that involve a number of risks and uncertainties that could cause actual results to differ materially from the future results expressed or implied by such forward looking statements. Such factors include, among others, the following: the uncertainties related to the development and introduction of products based upon new technologies, including manufacturing ramp and customer acceptance; the highly competitive nature of Seagate's industry and the rapid technological change within Seagate's industry; the uncertainty of patent and proprietary technology protection and the risks associated with litigation regarding the patents and other intellectual property rights; the importance of retention and attraction of key technical and other employees; general economic and business conditions; and other factors listed from time to time in Seagate's SEC reports.
NOTE: Seagate and Seagate Technology are registered trademarks of Seagate Technology, Inc. All other trademarks are the property of their respective owners.
SOURCE Seagate Technology Inc.
/CONTACT: Woody Monroy of Seagate Technology, Inc., 408-439-2838, or firstname.lastname@example.org; or Phil Montero of Quinta Corporation, 408-467-0108, or email@example.com/
CO: Seagate Technology Inc.; Quinta Corporation ST: California IN: CPR SU: TNM
BD-KF -- SFW018 -- 7600 07/02/97 08:03 EDT http://www.prnewswire.com
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|Date:||Jul 2, 1997|
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