History (1993): Exabyte to Acquire Tallgrass and Mass Storage Division of Everex

Exabyte Corp. (Boulder, CO) is continuing its diversification beyond its 8mm main business.

After buying over R-Byte last October, which brought the company a know-how in DAT technology, the Colorarado firm is setting a foot in QIC drive tapes and subsystems.

It has signed letters of intent to acquire Tallgrass Technologies Corp. (Lenexa, KA) for $1.5 million and the Mass Storage Division (MSD) of Everex Systems Inc. (Fremont, CA) for $5.5 million, in both cases in cash. Completion of these transactions is subject to the satisfaction of a number of conditions that were not disclosed.

Exabyte’s last financial results seem to show a pause in its growth, until then exceptional. An enlargement of its catalog and customers had to be done.

“Through such acquisitions, Exabyte is strengthening itself to compete more effectively in meeting the computer industry’s new and expanding needs for storage and storage management capabilities, “said Peter Behrendt chairman, president and CEO.

Until then, Exabyte only focused on hardware, which meant 4mm drives, 8mm drives and libraries. The company is now acquiring new capabilities to build subsystems or network environment solutions, but it is also buying a new distribution network.

The trend in enlarging activities is concerning more and more storage companies. Recently there were Conner (with Archive), Seagate (with Sundisk), Hewlett-Packard (with Colorado Memory), Iomega that started with Flopticals and tape drives, etc. Conner wants to be a complete storage solution company, Exabyte a complete tape storage solution company.

Everex Systems, a $500 million computer manufacturer, filed for protection under Chapter XI in January. It was founded in 1983 by Steve Hui, John Lee and Wayne Cheung, and became public in 1987. In 1988, it put its name on its own computer systems. It offers a range of IBM and Macintosh peripherals, tape drives, HDD subsystems, etc.

Exabyte, for a long time an associate member of the QIC committee, is acquiring only one of its division, the MSD, which designs, manufactures and supplies QIC DC-2000 cartridge drives for computer and network environment. The MSD acquisition includes the tape R&D unit, consisting of a group of engineers in Ann Arbor, MI, and the company tape manufacturing assets in Fremont, CA. The R&D team will remain in Ann Arbor, and manufacturing will be transferred to Exabyte’s HQ in Boulder, where several thousand units have already been shipped. The MSD DC-2000 QIC drive is a 3.5-inch form factor device with a SCSI interface and a native capacity of 566MB and a transfer rate of 567KB/s. Future plans include migration path for multi-gigabyte capacities on the DC-2000 cartridge with higher performance.

Tallqrass should function as a wholly-owned subsidiary of Exabyte, retain its name and stay in Kansas. It was offering a line of storage management software and tape storage systems in QIC, 4mm and 8mm format for most popular operating and networking environment. In 1992, Tallgrass posted revenues of $9.3 million and remained profitable.

This article is an abstract of news published on the former paper version of Computer Data Storage Newsletter on issue ≠61, published on February 1993.