Storage Technology, NSC Agree to Merge

Storage Technology Corp. and Network Systems Corp., which supply computer storage and data communications systems, said Tuesday that they have agreed to merge in a stock swap valued at about $300 million.

Storage Technology said the deal is believed to be the first merger of a major computer storage provider and a leader in high-performance computer networking products.

“The networking solutions and product-development capabilities that NSC will bring to StorageTek will allow us to accelerate our plans to become the leader in storage management for enterprise-wide networks,” said Ryal Poppa, Storage Technology’s chairman, president and chief executive.

“This merger will give StorageTek access to a key technology: enterprise switching that can consolidate voice, data, image and video traffic,” he said.

The goal is for users, whether at workstations or at personal computers, to have access to massive amounts of data stored in mainframe computers.

“It’s like a smorgasbord, you take what you want,” said Casey Stern, managing director of Starr Securities, who called the merger “very exciting.”

The technology that will make moving data easier among different types of users is Network Systems’ enterprise routing switch, which is being developed jointly with Northern Telecom.

“It’s a good fit, but there are a lot of challenges ahead,” said Piper Jaffray analyst David Rothschild.

But Storage Technology shares fell $2 to $37 on the news.