History 2000: Maxoptix May Acquire Breece Hill Assets

During the recent Comdex, the news was not yet official, but that did not prevent Maxoptix from printing up T-shirts, sported by several employees, associating its name with that of Breece Hill.

In this way, Maxoptix’s management, and its president and CEO Gary Potts, in particular, confirmed to us that the company intends to acquire the assets of library manufacturer Breece Hill, a subsidiary of the financially-troubled Global Maintech, now known as Singlepoint Systems.

Recall that Tandberg Data had previously tried to buy Breece Hill, but was ultimately forced to abandon, due to the latter’s lower-than-announced financial results.

If, at that time, we pointed out the excellent fit between the tape drive and tape library manufacturers, this time we’re much more reticent. Why on earth is Maxoptix, until now a firm entirely dedicated to 5.25-inch optical products, and currently working on new OSD technology, sniffing around tape automation products?

In fact, Maxoptix has every intention of positioning its OSD, first with a removable 13GB cartridge unit, vs. tape drives in near-line applications, and thus to intrude on the tape market.

Moreover, the company doesn’t seem too happy with partner Kubota, which currently manufactures its libraries in Japan.

Maxoptix will thus look to Breece Hill to design new automation products in the tape domain as well as for future OSD cartridges.

That said: we still have a hard time understanding why Maxoptix does not prefer to focus its efforts on OSD, which represents its single best chance to thrive, rather than diversify (or worse yet, lose itself) in libraries. The most likely reason is that the company has no significant money woes at the moment, thanks to the backing of a major Texan investor, H. T. Ardinger, who will dip into his pockets if things get tight.

Ardinger was a leading participant in the initial $10 million financial round, completed in 1999. And was present once again, to the tune of $7 million, for the recently closed second round, which enabled Maxoptix to raise $19 million. Among the other investors are Lafe, a supplier of recording heads for Quantum’s SuperDLT drives and Maxoptix’s partner for new Far Field Recording head technology used in OSD drives. A third financial round will likely be necessary, in order to transform OSD into a finished product.

This article is an abstract of news published on issue 155 on December 2000 from the former paper version of Computer Data Storage Newsletter.