Seagate leads merger flurry

2006 was brought to a close with a flurry of acquisitions: a fitting end to a year typified by M&As. With markets at a high, experts believe that there will be no let-up to deal making in 2007.

On 21 December, Seagate made a strategic shift into web-based storage via an $185m agreement to acquire Evault. At eight years old, Evault is, in relative terms, a veteran of the fast-growing online storage sector. The Californian company positions itself as a provider of services for storing data in a safe location to assuage concerns over business continuity, archiving and legal recovery processes.

The deal will see Seagate continue to branch out from its core hard drive business where it has over a third of the total market, according to research firm iSuppli. In 2005, Seagate acquired Mirra, a maker of a personal servers for automatic backup of documents. In October last year, the firm opened its data recovery services facility in Amsterdam, supplementing similar north American services that help retrieve information on severely damaged media.

The capture of Evault will bolster Seagate’s services push by giving the firm a stake in web storage, which has evolved from consumer email and photo and document storage to take on an increasing chunk of the business sector as firms seek cost-effective ways to meet corporate governance rules and lean on third-party experts to help them.

In a statement, Seagate chief executive Bill Watkins said the company planned to “become a leading provider of services to manage and protect our customers' digital content throughout its lifecycle”.

Another company plumping up through acquisition was Citrix Systems, best known for its server-based computing software. On 20 December, Citrix said it would acquire closely-held Ardence, a company that develops software for provisioning desktops and servers. The purchase complements recent moves that have seen Citrix target application delivery on several fronts, including virtualisation and streaming.

With US and UK markets touching highs not seen for several years, there is also no sign of a slowdown in mergers and acquisitions occurring in 2007. Today, for example, financial services software firm CheckFree agreed to acquire rival Carreker for around $206m. Several other deals are pending, including Motorola’s acquisition of Symbol Technologies, which is expected to close this month, and Brocade’s purchase of McData, expected to be complete by the end of March.

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