Tape automation vendor Exabyte has entered into an agreement to merge with Ecrix Corporation which will effectively see Ecrix become a wholly owned subsidiary of Exabyte.
Announcements last night (Australian time) on Nasdaq, cite complementary technologies between Exabyte's MammothTape and Ecrix's VXA drives, as the reason for the merger. However, the move quells previous rumours that rival storage vendor Tandberg Data had been circling Exabyte with a view to acquire the company.
Meanwhile Richard Giddy, regional manager Australia and New Zealand, claims it is "too early to tell" what effect the merger will have on Exabyte and Ecrix's local channel operations. Currently Exabyte and Ecrix are distributed through competing distributors.
Under the terms of the merger agreement, Exabyte will issue 10 million shares of common stock in exchange for all of the outstanding equity of Ecrix. Additionally, certain Ecrix investors and persons related to them will invest $9.4 million in new Exabyte Series H preferred stock at $1.00 per share at the time of closing.
According to a statement released by Exabyte, the preferred stock will be convertible into common stock on a share-for-share basis.
The transaction has been approved by both boards of directors and is subject only to the approval of both companies' shareholders and other closing conditions. The merger is expected to close by the end of 2001.