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MTI Europe Finally Acquired by Garnett & Helfrich Capital

In a letter to its customers, suppliers and partners, Keith Clark, GM of MTI Europe wrote:” Garnett & Helfrich Capital, the venture buyout for mid-sized technology spinouts, submitted the winning bid in the U.S. courts in California on Tuesday November 2007 to acquire MTI Europe.”

Formed in March 2004 and based in San Mateo, CA, Garnett & Helfrich is a $350 million private equity fund. In its portfolio, there are IT companies including BLADE Network Technologies, Celunite, Ingres Corporation, Openwater Software and Wyse.

Clark didn’t reveal  the price of the transaction but, according to an inside source of MTI, it’s around $7.3 million, more than the sum previously offered by Zinc Holdings, $5.5 million in cash. Another company interested by MTI Europe was Incentra Solutions, a U.S. provider of IT storage solutions in North America and Europe.

After several years of losses, U.S.-based MTI Technology filed for Chapter XI bankruptcy and was dissolved. Collective Technologies, a company acquired by MTI last year, was relaunched by Ed Taylor with customers and some employees let off from MTI.

But the situation was different in Europe which numbers 130 people and has annual sales of $70 million out of a total of $150 million for the entire company, according to Roger Bearman, European VP. “U.K., Germany and France are all profitable individually“, he told us.

MTI was a pioneer in disk arrays, especially for DEC computers, and then FC SAN technology, at one point serving almost 4,000 direct customers. The firm filed close to 44 patents, all acquired in 1996 by EMC. Despite its excellent storage know-how, MTI struggled to resist strong competitors such as EMC or IBM, and decided in 2003, under the guidance of president and CEO Tom Raimondi, who came in the company in 1987, to cease production of its own systems in order to become a simple VAR and EMC reseller. This strategy did not ensure the company’s survival, despite the financial support of partner and shareholder EMC which owned 11% of the company common stock.
MTI milestones
1987 Founded with pioneering RAID technology
1993 Merged with Systems Industries, under Chapter XI; became public
1995 Signed a letter of intent to acquire National Peripherals
1996 Patents portfolio acquired by EMC for $40 million
1999 Acquired a 15% minority ownership in Linux software house Caldera System
2003 Became an official reseller of EMC and became an integrator only
2004 Got a $4 million investment from EMC
2005 Got another $5 million investment from EMC; closed its Dublin, Ireland facility
2006 Acquired the assets of EMC distributor Collective Technologies
April, 2007 Received Nasdaq notice of non-compliance
October, 2007 In Chapter X

 


MTI Europe

Garnett & Helfrich Capital
Collective Technologies

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