Seagate buyout expands services
Seagate Technology, the biggest maker of computer disk drives, agreed to buy EVault Inc. for $185 million to expand in online data storage services.
EVault, with more than 250 employees, provides networked access to archived records and disaster recovery assistance, according to Seagate.
The purchase is Seagate’s third involving storage services or software, reducing the company’s reliance on making disk drives for computers and consumer electronics. In September 2005, Seagate bought Mirra Inc., a provider of data security products. In April, Seagate acquired ActionFront Data Recovery Labs Inc., a specialist in getting information out of disabled devices.
“We think about it as kind of a natural extension of the hard drive,” said William Watkins, chief executive of Seagate. “We think long-term, it’s really building a whole services strategy.” He said no job cuts were planned at EVault., based in Emeryville, Calif.
“We have an appetite for acquisitions,” Watkins said, adding that buying other companies is part of Seagate’s growth strategy.
The deal “signifies a longer-term strategic direction for Seagate to become more of a storage solutions provider,” said Aaron Rakers, an A.G. Edwards & Sons analyst in St. Louis. Rakers, who rates Seagate shares “hold,” said EVault’s estimated $54 million in annual revenue would provide a “modest” increase in Seagate’s revenue.
EVault, started in 1997, serves more than 8,500 customers, including healthcare providers and law firms, Seagate said. EVault’s services include remote storage and online data backup.
Shares of Seagate, based in George Town, Cayman Islands, and run from Scotts Valley, Calif., fell 56 cents to $26.34 on Thursday. They’ve risen 32% this year.
Seagate increased its dominance of the disk drive business this year by acquiring Maxtor Corp., its largest rival, for about $1.9 billion.