Dot Hill Announces Acquisition of Cloverleaf Communications
05 Janvier 2010 - 2:55PM
PR Newswire (US)
Accelerates Company into Heterogeneous Storage Virtualization, Data
Management Services Software and Unified Storage Markets Management
to Conduct Conference Call to Discuss Acquisition Strategy and
Details on January 7, 2010 Company reaffirms Q409 Financial
Guidance CARLSBAD, Calif., Jan. 5 /PRNewswire-FirstCall/ -- Dot
Hill Systems Corp. (NASDAQ:HILL), a provider of world-class, entry
level and midrange external RAID storage arrays for OEMs, Open
Storage Partners and System Integrators, today announced that it
has entered into a definitive purchase agreement to acquire
Cloverleaf Communications Inc., a privately held software company
and an emerging leader in advanced heterogeneous storage
virtualization and unified storage technologies. The acquisition is
intended to significantly broaden Dot Hill's reach into the storage
virtualization, data management services software and unified
storage markets. Cloverleaf's administrative headquarters are in
Woodbury, New York and its research and development facilities are
in Israel. The company's advanced virtualization and unified
storage software products have been deployed for several years by a
wide range of end users, including financial, legal and
entertainment media companies as well as government agencies who
require scalable performance and fully featured storage resource
management for medium to large scale storage deployments.
Cloverleaf's intelligent Storage Network (iSN) software products
are designed to work heterogeneously across all vendors' storage
arrays and support a common suite of advanced data management
services. The iSN products provide significantly improved returns
on investment for end users by consolidating data and disaster
recovery management under a single pane user interface regardless
of storage type or vendor. Cloverleaf was formed in 2001 when it
acquired its core product technology from Elta Systems / Israel
Aerospace Industries (IAI), a multi-discipline systems research and
development company. This technology was derived from hundreds of
man-years of development related to high performance, secure
communications and networking systems and has been proven in
mission-critical military and commercial applications. Cloverleaf
had secured investments primarily from leading venture capital
firms in Israel. As part of the transaction, a number of
Cloverleaf's founders, including Elic Yavor and Yosi Klein, will be
joining Dot Hill Systems. Dr. Yavor and Mr. Klein were part of the
core development team from ELTA Systems / IAI and bring many years
of development experience to Dot Hill. Cloverleaf's products are
entirely software based and run on standard Intel architecture
hardware. The suite of products provide unified management and
support of any vendor's storage arrays and include features such as
storage virtualization and pooling across mixed vendor SAN and NAS
storage, thin provisioning, automated tiered provisioning, data
migration, advanced snapshot, FCDP (Frequent Consistent Data
Protection), synchronous and asynchronous replication and remote
disaster recovery at host speeds of up to 24GB/s rates. In
addition, Cloverleaf's virtualization and data management services
support both file and block I/O with Fibre Channel and NFS/CIFS
protocol support. The iSN products can also be clustered for near
linear performance gains with up to 12 controllers being deployed
in a single configuration. "The addition of Cloverleaf's products
to the Dot Hill portfolio complements our existing storage array
and software offerings while extending our reach into adjacent and
emerging markets such as cloud based storage and storage
virtualization," said Dana Kammersgard, president and chief
executive officer of Dot Hill. "This transaction is intended to
quickly elevate us beyond the storage array market and establish
Dot Hill as a technology leader in the higher margin storage
software market. Cloverleaf had invested over $43 million dollars
and nine years of development in these products that provide data
management services such as clustered virtualization, synchronous
and asynchronous replication, thin provisioning, FCDP and automated
storage tiering across a mixed and diverse storage array base. The
iSN products specifically address the complex, heterogeneous
requirements of most end user environments. They solve critical
customer problems in a unified manner and as a result, represent
key growth areas within our target markets. We expect that our
existing and prospective OEM and channel partners will be very
interested in considering these products as we prepare them for
launch later this year." "This acquisition is in line with our
previously stated objectives to transform Dot Hill into a storage
software and solutions focused company," continued Kammersgard.
"Cloverleaf's products accelerate this plan by as much as two years
and with the breadth of features they provide, we believe we can
compete very well with both the virtualization appliance companies
as well as with the newer storage companies who bundle similar
features that operate solely on their own array products." "We
expect this acquisition could be accretive to our financial results
in 2011," said Hanif Jamal, Senior Vice President and Chief
Financial Officer of Dot Hill Systems. "Adding this new technology
represents a key step in the transformation of our business to a
more software-centric financial model as we can extend Dot Hill's
products and solutions into higher value add, higher margin areas
within the storage markets we serve. Dot Hill's strong balance
sheet and improving financial results have enabled us to make this
important acquisition to accelerate the next phase of our
technological evolution. We believe we will meet our guidance of
$62 to $67 million in revenue for the fourth quarter of 2009, a
non-GAAP loss in the 1 to 7 cent range and expect to end the year
with $55 to $60 million in cash and cash equivalents." "I am
excited that Dot Hill and Cloverleaf Communications are merging to
create innovative solutions to advance storage technology for a
wide range of customers," said Eddy Shalev, Chairman of Cloverleaf
Communications Inc. and Founder and Managing Partner of Genesis
Partners. "By combining Cloverleaf's experienced team and robust
products with Dot Hill's strong development, sales, marketing and
customer support capabilities, I believe we can rapidly grow the
customer base for the iSN products. The investors and management of
Cloverleaf have shown our confidence in this combination by
accepting Dot Hill common stock as a significant portion of the
acquisition consideration. This demonstrates our belief that the
combined organization will be worth more than the two organizations
independently." Under the terms of the agreement, Dot Hill will
purchase the company for cash of $2.5 million plus approximately
$9.5 million in shares of unregistered Dot Hill common stock based
on the 30 day trailing average closing price of the common stock as
of December 31, 2009. Additional details of the transaction have
been provided in the Current Report on Form 8-K filed today by Dot
Hill with the Securities and Exchange Commission. The acquisition
has been approved by the Board of Directors of Dot Hill Systems and
the principal shareholders of Cloverleaf Communications. Although
subject to customary closing conditions, the transaction is
expected to close by the middle of January 2010. The transaction
does not require the approval of Dot Hill's shareholders.
Conference Call Details In conjunction with this announcement, Dot
Hill management will conduct a conference call at 5 p.m. (Eastern)
January 7, 2010. The conference call will be available live via the
internet by accessing Dot Hill's web site at
http://www.dothill.com/. Please go to the website at least 15
minutes prior to the call to register, download and install any
necessary audio software. To listen to the conference call via
phone, please dial 1-877-941-9326 from within the United States or
dial 1-480-629-9851 if calling Internationally. For those who
cannot access the live broadcast, a replay will be available by
dialing 1-800-406-7325 domestically or 1-303-590-3030
internationally and entering "4198417" from one hour after the end
of the call until 11.59 pm EST on January 14, 2010. The replay will
also be available at the Dot Hill website. About Cloverleaf
Communications Inc. Cloverleaf addresses these most fundamental
business concerns - flexibility and optimization of resources,
time, and money - by introducing capabilities that make storage a
positive strategic asset, rather than simply a considerable
obligation. Through its Intelligent Storage Networking (iSN)
system, Cloverleaf provides the advanced services that deliver on
the promise to give data center managers control. Essentially,
Cloverleaf's iSN simplifies management, eliminates downtime, and
cuts storage costs, delivering real operation efficiency,
technology benefits and business value. Companies that implement an
iSN can run their businesses smarter, faster and more cost
effectively. Founded in 2001, privately-held Cloverleaf is
headquartered in Woodbury, New York with a technology development
office in Israel. The company delivers its product to customers
direct and through an elite channel of system integration partners
and OEM partners located in North America and Europe. The iSN
solution is available to partners either as a turn-key
virtualization machine or integrated in an OEM/reseller rack with
their own storage solution or as a software license to be installed
by OEM in their own storage racks. For more information, visit
http://www.cllf.com/. About Dot Hill Systems Corp. Delivering
innovative technology and global support, Dot Hill (NASDAQ:HILL)
empowers the OEM community to bring unique storage solutions to
market, quickly, Hill's RAID technology is the foundation for
best-in-class storage solutions offering enterprise-class security,
availability and data protection. The company's products are in use
today by the world's leading service and equipment providers,
common carriers, advanced technology and telecommunications
companies as well as government agencies. Dot Hill solutions are
certified to meet rigorous industry standards and military
specifications, as well as RoHS and WEEE international
environmental standards. Headquartered in Carlsbad, Calif., Dot
Hill has offices and/or representatives in China, Germany, Japan,
United Kingdom and the United States. For more information, visit
us at http://www.dothill.com/. HILL-F Statements contained in this
press release regarding matters that are not historical facts are
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act. Because such statements are
subject to risks and uncertainties, actual results may differ
materially from those expressed or implied by such forward-looking
statements. Such statements include statements regarding the effect
of Dot Hill's acquisition of Cloverleaf on Dot Hill's business and
financial results, statements with respect to future operating
expenses and the potential market opportunities associated
therewith and statements regarding Dot Hill's projected financial
results for the fourth quarter of 2009 and year-end cash position.
The risks that contribute to the uncertain nature of the
forward-looking statements include unforeseen technological,
intellectual property, supply or engineering issues and changing
customer preferences, and the additional risks set forth in the
forms 8-K, 10-K and 10-Q most recently filed by Dot Hill. All
forward-looking statements contained in this press release speak
only as of the date on which they were made. Dot Hill undertakes no
obligation to update such statements to reflect events that occur
or circumstances that exist after the date on which they were made.
DATASOURCE: Dot Hill Systems Corp. CONTACT: Hanif Jamal of Dot Hill
Systems Corp., +1-760-431-4405, Web Site: http://www.dothill.com/
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