When backup and archiving storage specialist Quantum (NYSE: QTM) elevated COO and former CFO Jon Gacek to the CEO post, it looked like a vote for tighter cost controls. After all, Gacek comes from a heavy financial background, including a three-year stint as a partner at accounting giant PricewaterhouseCoopers.
But with Quantum's fourth-quarter report in hand, and Gacek's first chance to run an analyst call complete, I have to wonder whether the board didn't want something else out his background.
- At PWC, Gacek specialized in mergers, buyouts, and acquisitions.
- His ascendance to Quantum's throne was swiftly followed by a tighter partnership with storage all-rounder NetApp (Nasdaq: NTAP). Specifically, NetApp is filling a hole in its product portfolio with Quantum's StorNext data warehousing systems.
- And here's where the plot thickens: NetApp was already a Quantum partner. Quantum's software is a big part of the deduplication appliances NetApp resells for Fujitsu in Europe, and NetApp actually became a parts supplier to Quantum when it picked up the external storage division of LSI (NYSE: LSI).
Gacek highlighted all of this -- except for his merger expertise, of course -- in the earnings call. The quarter itself was merely decent, with $0.04 of non-GAAP earnings per share on $165 million in revenue, improved by a cautiously optimistic outlook on fiscal year 2012.
But the possibility of a NetApp buyout should make Quantum shareholders drool uncontrollably. NetApp could use the company's data management expertise, doesn't have anything like Quantum's tape-silo solutions, and got into a bidding war with EMC (NYSE: EMC) over deduplication specialist Data Domain two years ago.
NetApp is on a spending spree, with billions of dollars still burning a hole in its pocket. Quantum would come cheap, with an enterprise value of just $817 million today. And hey! Quantum's new boss just happens to be an expert at putting deals together. It all makes sense now.
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