KUHN CAPITAL Wednesday, December 13, 2017
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Adaptec Adopting EMC Approach

January 25

Adaptec, a vendor of stored data solutions competing in part with EMC, has announced its acquisition of Elipsan, a provider of solutions that move and manage data, terms undisclosed.

The move is reminiscent of EMC's recent spate of deals in which it is attempting to climb out of the commoditized storage hardware industry and enter the less constrained networked data shuttling business. (See our prior blurb on this subject.)

With sales of about $425 million and a marketcap of $1.2 billion, Adaptec is considerably smaller than EMC (2003 sales of about $6.2 billion) and it sells through margin-squeezing OEM channels. But the company has recently reversed a long slide, pushing its stock price from about $6 to about $10 in the last year. Meanwhile, though, during this period EMC's stock has doubled.

In a word, we anticipate more consolidation in the large storage solutions segment.


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