Adaptec, Inc. (NASDAQ:ADPT) (the “Company”) announced today that on May 8, 2010, it signed a definitive agreement with PMC-Sierra, Inc. to sell to PMC certain assets and for PMC to assume certain liabilities connected with the Company’s data storage hardware and software business for approximately $34 million in cash. Following the sale to PMC-Sierra, the Company will retain its Aristos ASIC technology business, certain real estate assets, more than 200 patents, and approximately $400 million in cash and marketable securities.
Since 2009, the Company has set forth plans to re-deploy the substantial amount of liquid assets and unlock the tax benefits of the Company’s net operating losses to maximize value for all stockholders. Following this transaction with PMC-Sierra, the Company’s Board of Directors plans to explore all strategic alternatives to deploy the proceeds of the sale and the Company’s other assets, which may include stock buybacks, special cash dividends, future acquisitions and other actions to redeploy capital. Additionally, the Company will, as previously announced, continue to consider its options related to its Aristos ASIC technology business, remaining patents and real estate holdings.
“Over the last two years, the Company’s stockholders made abundantly clear that they demand a change in the direction of the Company to realize value from the Company’s historical operating units. This transaction with PMC-Sierra, which represents the sale of a small portion of the Company’s total assets, represents that change and continues the process of moving the Company away from its previous unprofitable identity as a ‘pure-play’ technology company,” said Jack Howard, Chairman of the Board of Adaptec. “The Board of Directors remains committed to providing value to all of the Company’s stockholders, and will aggressively pursue opportunities to deploy the significant cash and liquid assets on hand to create value for the Company’s stockholders.”
The Board of Directors of the Company retained Blackstone Advisory Partners L.P. (“Blackstone”) in June of 2009 to assist Adaptec in analyzing and exploring strategic alternatives, and launched a broad auction sale process for the Company’s operating assets in September of 2009. Following a thorough sale process, the Board determined that the transaction with PMC was in the best interest of the Company’s stockholders. The Board of Directors of the Company received a written opinion from Blackstone to the effect that, as of the date of the opinion and based upon and subject to the various considerations set forth in the opinion, the consideration to be received by Company in the transaction is fair from a financial point of view.