Overland Storage, a San Diego provider of data storage services, agreed to be acquired by Sphere 3D Corp., a Canadian business for $81 million in stock.
The price to be paid by Sphere 3D was 53 percent above the closing price of Overland’s shares on the day before the deal was announced May 16.
After the transaction is completed, the current holders of Overland’s stock will own about 29 percent of the equity in Sphere 3D, which is headquartered in Ontario, Canada.
The companies said that they have been working to develop an integrated application virtualization and data storage platform, and virtual desktop infrastructure solutions. The platform allows the delivery of third party applications via the cloud.
The combination of the companies’ products will allow mobile device users to access any software program and eliminate application limitations, the companies said.
Peter Tassiopoulos, Sphere 3D’s chief executive officer said, “This transformational deal allows us to immediately gain the scale, infrastructure and resources required to become a leading global virtualization company.”
The deal requires approval of Overland’s shareholders but the company’s largest investor, Cyrus Capital Partners, which owns 63 percent, entered into voting agreements supporting the transaction.
Overland acquired a German software business, Tandberg Data Holdings, after it obtained a large infusion of capital from Cyrus last year.
Founded in 1980, Overland has struggled in the wake of losing its largest customer, Hewlett Packard, in 2006. Its annual revenue cratered from about $236 million in 2005 to below $100 million for much of the past five years.
For the third quarter ended March 31, Overland reported revenue of $20.2 million, and a net loss of $6.6 million. That compared with revenue of $11.6 million and a net loss of $5.1 million in the like quarter of 2013.