Overland Storage, the San Diego based provider of data storage services, agreed to acquire Tandberg Data, a German data storage and protection business in an all-stock transaction for an undisclosed price.

Counting Tandberg’s annual revenue of about $60 million, the new business would have annual revenue exceeding $100 million.

Overland ( Nasdaq: OVRL) CEO Eric Kelly said the combination of the two companies will provide Overland with a clearer path to profitability, and one of the broadest product lines and service offerings in the enterprise storage marketplace.

“The combination of Overland and Tanberg will expand our geographical reach in Europe, Asia and the Middle East, as well as strengthen the research and development team,” Kelly said.

Cyrus Capital, which owns Tandberg Data, and other convertible debt holders will convert about 81 percent of their outstanding debt shares to shares of Overland Storage at $1.30 per share. Kelly will continue to serve as president and CEO of the new company, while Kurt Kalbfleisch continues as CFO, and Randy Gast will serve as COO, a new position, the company said.

Overland’s board of directors will expand to seven, including five current members and two to be appointed by Cyrus Capital.

The acquisition is expected to be completed by the end of December, assuming customary shareholder and regulatory approvals, the company said.

Shares of Overland rose 8 cents to 98 cents on the Nasdaq exchange Nov. 1, giving the company a market capitalization of $30.5 million.

Mike Allen