Sun Microsystems to acquire Storage Technology Corporation

Sun Microsystems to acquire Storage Technology Corporation

Networking giant Sun Microsystems has decided to take over the Storage Technology Corp for a reported price of USD 4.1 Billion in cash. The deal is expected to enhance Sun’s capabilities in the rapidly growing market for data storage.

The deal would mean that Sun would be paying USD 37 per share for the company, which is based at Louisville, Colorado. This price is around 19% over the market rate of the shares of the company at the end of day in the market yesterday.

This deal is one of the biggest in recent times as Sun Microsystems tries to get back on its foot in the market after seeing a big downtime in the recent times. The deal is also expected to get Sun back into the frontrunners in the computer server market.

Companies like IBM and Dell are rapidly growing in this particular segment of the market and are challenging the Sun Microsystems big-time. Sun’s CEO Scott McNealy had this to say about this latest deal: “We have the cash; we have a strong financial position. We have committed to turning the huge cash position at Sun into profitable growth.”

Scott believes that the timing is right for such a major market move. He added: “It was becoming a more and more important component of solving these complex network computing problems”. The company just recently posted a $9 million quarterly loss in April, down from a $760 million loss a year earlier.