SOURCE: Adaptec

October 04, 2005 20:00 ET

Adaptec to Divest Systems Business

Adaptec Plans to Sharpen Business Focus on Serial Attached SCSI and Serial ATA Components as Well as RAID & Storage Software

MILPITAS, CA -- (MARKET WIRE) -- October 4, 2005 -- Adaptec, Inc. (NASDAQ: ADPT), a global leader in storage solutions, today announced it intends to divest its systems business, an $80 million annual run rate business that includes assets gained through several acquisitions including the Snap Server network attached storage (NAS) and Eurologic block systems hardware and software assets. The company has retained Credit Suisse First Boston (CSFB) as its financial advisors.

Adaptec's systems business has won numerous industry awards over the last year. The award-winning Linux-based GuardianOS software and other NAS software capabilities are included as assets in Adaptec's systems business. Intellectual property and capabilities gained from the Eurologic acquisition are also included.

"As mentioned in our last earnings call, our management team has been conducting a very thorough analysis of all of Adaptec's businesses and operations," said Scott Mercer, interim CEO of Adaptec. "While we have successfully built a solid suite of storage systems products and gained a volume leadership position in NAS, it became clear that we needed to simplify our business model."

Adaptec President, S. "Sundi" Sundaresh added, "It was a hard decision for us, but we feel that selling our systems business is the best move for the company and its shareholders as we take the necessary steps in Adaptec's recovery. This will allow us to focus our internal resources on capturing a leadership position in the emerging Serial ATA and Serial Attached SCSI markets."

Adaptec plans to increase its focus on its core components business including its industry-proven RAID software, virtualization software stack and Adaptec Storage Manager. Moving forward, Adaptec will also focus on activities that improve its market leadership in the Channel, capturing greater share in serial technologies, as well as on expanding product capabilities and performance.

During this transition, Adaptec plans to maintain current activities and investment in its systems business. Further financial information concerning Adaptec's systems business will be provided in conjunction with our fiscal Q2 2006 earnings release and conference call currently scheduled for Thursday, November 3 at 1:45 PST.

Safe Harbor Statement

This news release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended. Forward-looking statements include statements regarding future events or the future performance of Adaptec including, but not limited to, the divestiture of the Company's systems business. These forward-looking statements are based on current expectations, forecasts and assumptions and involve a number of risks and uncertainties that could cause actual results to differ materially from those anticipated by these forward-looking statements. These risks include: identifying potential buyers for the systems business; market demand for RAID products; difficulty in forecasting the volume and timing of customer orders; reduced demand in the server, network storage and desktop computer markets; our target markets' failure to accept, or delay in accepting, network storage and other advanced storage solutions, including our SAS, SATA and iSCSI lines of products; decline in consumer acceptance of our current products; the timing and volume of orders by OEM customers for storage products; our ability to control and manage costs associated with the delivery of new products; and the adverse effects of the intense competition we face in our business. For a more complete discussion of risks related to our business, reference is made to the section titled "Risk Factors" included in our Quarterly Report on Form 10-K for the year ended March 31, 2005, on file with the Securities and Exchange Commission. Adaptec assumes no obligation to update any forward looking information that is included in this release.

About Adaptec

Adaptec, Inc. (NASDAQ: ADPT) provides trusted storage solutions that reliably move, manage, and protect critical data and digital content. Adaptec's software and hardware-based solutions are delivered through leading Original Equipment Manufacturers (OEMs) and channel partners to provide storage connectivity, data protection, and networked storage to enterprises, government organizations, medium and small businesses, and consumers worldwide. Adaptec is an S&P Small Cap 600 Index member. More information is available at www.adaptec.com.

Contact Information

  • Editorial Contact:
    Mary Camarata
    Adaptec, Inc.
    408-957-1630
    Email Contact

    Investor Contact:
    Marshall Mohr
    Adaptec, Inc.
    408-957-6773
    Email Contact