Overland appears set to emphatically reject ADIC's unwanted and unwelcome bid. Two people in a position to understand the company's thinking say the bid is crazy and just interference. Overland's new production direction is already generating results with REO recording 38 percent quarter on quarter growth and reaching its 2,000th sale.
Contrary to my previously expressed term ADIC is not a 'struggling' company and: "From an investor's point of view this is a really interesting company."
"The analysts look at us as a tape library manufacturer and we just lost our largest OEM. Actually the tape business is low margin. If we can grow our own business twenty percent we can offset this completely."
Their view is that ADIC CEO Peter van Oppen is an investment banker with no interest in technology. He's done this kind of thing before. Indeed a US research analyst familiar with the situation says that ADIC's war chest for this type of activity comes from previous share dealing when a company ADIC had invested in had a successful IPO.
The new REO OEM deal is with a tier one OEM, "who we know quite well," and is going to put the REO Protection O/S in a new virtual tape system product for the SME market. This will ship in the first quarter of 2006. It is a relatively high margin deal, being for software. More OEM deals are in the offing.
It is Techworld's understanding that Overland's primary disk strategy will soon become more visible in product terms.
Overland doesn't welcome ADIC's approaches: "They keep trying to buy us and we keep saying we don't want to be bought." Further: "They're not putting in a fantastic offer. It came in at 4 cents under the closing price." Further, and rudely: "It's a crazy, a silly offer. The last thing we need is for our channel partners to be distracted by this load of rubbish."
The message seems to be that ADIC's offer is too low to be attractive, much too low, and that Overland management is set on moving the company away from the low margin tape library business into a higher margin software and secondary and primary storage business - with some visible success.
It's saying in effect: "Please ADIC, go away and let us run our business."
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