PMC-Sierra CEO Greg Lang said during a conference call that the biggest reason for the deal was PMC-Sierra's desire to move into the reseller channel for x86-based RAID storage products. Adaptec sells its products through distributors, system integrators, VARs and OEM partners.
"This transaction allows us to accelerate our move into the channel by about two years," Lang said. "[Selling through the channel] will be a new type of business transaction from anything PMC has done."
Lang said Adaptec is one of the largest suppliers of x86-based RAID storage products, and the channel market for x86 RAID products is about $200 million per year. He said the Adaptec products should bring PMC-Sierra about $12 million to $13 million in revenue in each of the last two quarters of this year, and he expects the channel business to be profitable in the second half of the year.
Lang says the deal is complementary because PMC-Sierra has SAS silicon and firmware to go with Adaptec's products. The first step in the integration is to port Adaptec's products to PMC-Sierra's SAS chips, which should take about two or three quarters.
PMC-Sierra will offer jobs to about 90 Adaptec employees, mostly in engineering, sales and operations. Most of those employees are in Adaptec's Milpitas, Calif., office. PMC-Sierra expects the deal to close in about 30 days.
Lang says PMC-Sierra will use the Adaptec product portfolio to develop 6 Gbps SAS and 12 Gbps SAS products, as well as "new solutions for cloud computing going forward." He also intends to continue Adaptec's MaxIQ family of SSD caching devices.
Adaptec's directors put the company up for sale last December, but PMC-Sierra did not acquire all of Adaptec. Adaptec still has the RAID-on-chip ASIC technology business it acquired from Aristos Logic in 2008, and the company claims more than 200 patents, real estate holdings and approximately $400 million in cash and securities.
Adaptec's press release announcing the deal quoted Chairman Jack Howard saying the deal represents "a small portion of the company's total assets" and that Adaptec is willing to sell its remaining assets.