Sun to Buy StorageTek for $4.1 Billion

[HenryTo]

The $4.1 billion is an all-cash deal. $4.1 billion is a large amount any way you look at it and it's going to add quite a bit to stock market liquidity.
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Sun to Buy StorageTek for $4.1 Billion
Thursday June 2, 8:25 am ET
Server Maker Sun Microsystems to Buy Storage Technology Corp. for $4.1 Billion

SANTA CLARA, Calif. (AP) -- UNIX-based server maker Sun Microsystems Inc. said Thursday it agreed to purchase Storage Technology Corp. for $37 per share in cash, or $4.1 billion, including the assumption of employee stock options.

NYSE-listed shares of Storage Technology surged 17.8 percent, or $5.56, to $36.79 in premarket activity. Sun Microsystems shares closed Wednesday at $3.90 on the Nasdaq, and were up 18 cents, or 4.6 percent, at $4.08 in premarket activity.

The combination creates a network computing and data management firm which collectively had total annual revenue of more than $13 billion over the past four quarters. Louisville, Colorado-based StorageTek makes tape drives and network management and backup software for businesses and government agencies.

The deal has been approved by both boards of directors, and Sun said it expects the acquisition to add to operating profit in the first 12 months following the closing.

"Sun's technical and financial strength puts us in a great position to act as a consolidator in the IT industry. This acquisition is part of an ongoing strategy to respond to customers seeking to rationalize their datacenter purchases -- to free up time and dollars to focus on compliance, architectural integration, security and, of course, the bottom line," said Scott McNealy, chairman and chief executive officer of Sun Microsystems.

Following completion of the proposed transaction, which is expected to occur in late summer or early fall of this year, StorageTek will become fully integrated within Sun's organization.