Storage Dimensions to Acquire Artecon

Milpitas-based Storage Dimensions Inc. said it will buy larger Artecon Inc. for about $60 million in stock, with Artecon’s president, James Lambert, replacing David Eeg as chief executive. Separately, Storage Dimensions, a seller of tape drives and other computer data storage devices, said it expects to report a fourth-quarter loss of 10 cents to 15 cents a share on revenue of $16.5 million to $17.5 million. Storage Dimensions blamed its third consecutive quarterly loss on continuing problems with its newly expanded sales force. It said the addition of Carlsbad-based Artecon will improve its financial performance. The combined company will have about $170 million in revenue, compared with about $38 million for Storage Dimensions alone. Storage Dimensions said it will issue 12.9 million shares of common and preferred stock that is convertible into 840,000 additional shares, giving Artecon shareholders more than 60% of Storage Dimensions shares. The transaction is to close by March 31. Storage Dimensions shares rose 13 cents to close at $4.75 on Nasdaq.