Overland Storage, the San Diego provider of data storage products, said it received a proposal from Cyrus Capital Partners LP, for a potential business combination with a firm Cyrus owns, Tandberg Data Sarl.

Overland’s board of directors said it will evaluate the proposal and other strategic initiatives carefully. The firm retained Roth Capital Partners as its financial adviser to assist it in this process.

Overland has been struggling ever since it lost its largest customer, Hewlett-Packard Co., which stopped buying its products in 2006.

For the company’s third quarter that ended in March, it reported a net loss of $5 million on revenue of $11.6 million, compared with a net loss of $3.8 million on revenue of $15.2 million for the like quarter of 2012.

Shares of Overland, traded under OVRL on Nasdaq, were up 3.5 percent early May 28 to $1.17 giving it a market capitalization of $35 million. Its 52 week range is 91 cents to $2.32.

— Mike Allen