May 9, 2005 1:50 PM PDT

Sun to buy Procom storage assets

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Sun Microsystems has agreed to acquire storage system software and engineers from Procom Technology, a struggling provider of networked storage products, for $50 million in cash.

Sun already pays Procom for use of its NetForce operating system in Sun's 5000 line of network-attached storage (NAS) systems. Through the deal announced Monday, Procom will transfer the operating system, related patent applications and some engineers to Sun, a Procom representative said.

"Bolstering our NAS portfolio with the acquisition of Procom's technology reflects our ongoing commitment to the storage market," Mark Canepa, Sun's executive vice president of network storage, said in a statement. The transaction is expected to close in June, Sun said.

Sun has had trouble making gains in the storage market against rivals such as Network Appliance, EMC and Hewlett-Packard. But the Santa Clara, Calif.-based company steadfastly refuses to give up. Most recently, Sun introduced its StorEdge 6920, based on technology it acquired when it bought Pirus Networks in 2002.

Partnerships also have figured prominently in Sun's storage strategy. For example, its lower-end products are designed by a company called Dot Hill, while its top-end line is from Hitachi Data Systems. Sun announced the Procom partnership in April 2004.

Procom's stock, which was delisted from the Nasdaq Small Cap market in 2003, surged 61 cents, or 40 percent, to $2.16 in over-the-counter trading midday Monday. The company is based in Irvine, Calif.

Procom's board will evaluate the company's future business options, the representative said. The company also sells networked CD and DVD drives, hard-drive upgrades and external disk systems with built-in wireless network access points.

 

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