Adaptec to Buy Symbios for $775 Million

Adaptec Inc. on Thursday agreed to buy Symbios Inc., a subsidiary of Hyundai Electronics America, for $775 million in cash as it seeks to diversify its business and reverse a recent slowdown in sales growth.

Adaptec, which makes adapter cards that connect personal computers to printers, storage drives and other accessories, would use its $727-million cash reserve and take an undisclosed charge to buy Symbios. The company makes adapters and chip sets used in computer servers sold by Sun Microsystems, Hewlett-Packard and others.

The agreement with Hyundai, which has been forced to sell businesses because of the South Korean financial crisis, could help Adaptec recover from a sales slump. The purchase gives the company new technology and a broader customer base for a relatively low price, analysts said.

Milpitas-based Adaptec got Fort Collins, Colo.-based Symbios for a “fire sale price” from Hyundai, said one analyst, because the company needs to raise cash and replenish capital. Like other South Korean chaebols, or conglomerates, Hyundai this week was asked by Korean President-elect Kim Dae Jung to spin off marginal subsidiaries and focus on core businesses.

Most of Symbios’ 2,500 employees would keep their jobs, Adaptec officials said.

Adaptec shares rose 94 cents to $25.63 before the announcement. Trading was halted on Nasdaq before the market closed.