Boston, MA 06/14/2013 (wallstreetpr) – Shares of Overland Storage Inc. (NASDAQ:OVRL) were up by 16.98% to close at $1.24 with volume of 149K shares traded compared to average volume of 37.09K. Data management and protection company Overland Storage had recently announced of considering the proposal made by Cyrus Capital Partners L.P for a potential merger with Cyrus unit Tandberg Data Holdings in a 50:50 holding.
Overland however said that it is also open to other strategic options and has therefore hired Roth Capital Partners as its financial advisers.
As per Cyrus, such deal would open new venues for the company including complementary products and increased to market, potentially new opportunities with global OEM accounts and continuity in the automation business benefitting both companies.
It is presumed that Overland may accept the deal, as both companies had already conducted substantial due diligence in this regard. Initially, Cyrus’ offer was valid only until May 18, whose extension can be seen as keenness on the part of Cyrus about the deal.
Overland engages in providing services for primary, offline, nearline and cloud data storage. The company reported its third quarter loss which widened as a result of lower revenues. However in actuality, Overland is no more than a handicapped tape and disk data protecting and NAS storing supplier, which has been bleeding cash in recent times. It is a loss making business and has been recently facing NASDAQ delisting issues due to insufficient market capitalization. Such merger can be seen as a respite from its financial woes by acquiring the newly recovered Tandberg Data.
Tandberg Data too had, in April 2009, filed for bankruptcy after it was unable to repay a loan taken from Cyrus Capital, which ended by Cyrus later owning Tandberg. Since then, Tandberg had built its own RDX removable disk storage and thereby made an entry in the NAS market.
