SCSI component company Adaptec has said that it will take a charge of $70 million in its first quarter to account for the costs of acquisitions it has made.
The charges relate to technology it bought from Analog Devices and Ridge Technologies. Last April, Adaptec bought Ridge for over $21 million and paid $40 million in cash for Analog's IC technology. Both purchases were made so that the company could widen its range of products aimed at the enterprise storage market.
Adaptec also has to pay Analog Devices as much as $40 million in royalties on products that use its IC technology. Adaptec, like many technology companies, has predicted flat growth, owing to a combination of less orders and the economic woes in Asia. Its profit for Q4 was 20 per cent below what the company expected.
Adaptec, the world leader in SCSI cards, announced last week it was unsuccessful in trying to buy Hyundai subsidiary Symbios, and said then that the costs of attempting to buy the division would amount to $20 million. It dropped its plans to buy Symbios after the US Federal Trade Commission stepped in and said that the acquisition threatened to give it a monopoly stake in the SCSI and SCSI component market. Symbios was subsequently snapped up by LSI Logic for $70 million.
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