Network Appliance To Buy Spinnaker For $300 Million

Network Appliance Inc., a manufacturer of data-storage devices, Tuesday said it plans to buy Spinnaker Networks Inc., a Pittsburgh-based startup whose customers include Industrial Light & Magic, for $300 million in stock. The deal, which gives Network Appliance access to Spinnaker's software technology, is expected to break even within two quarters, Network Appliance CEO Dan Warmenhoven said.

Network Appliance, which recorded $892 million in revenue and $76.5 million in net income last year, makes network-attached-storage systems for Fibre Channel and IP networks. Its customers include Boeing, Merrill Lynch, Texas Instruments, and Yahoo. According to Network Appliance, buying Spinnaker, an 83-employee company whose other customers include Oak Ridge National Laboratory and the Salk Institute for Biological Studies, will help it compete with IBM, Sun Microsystems, and others by building better-designed networks of distributed computers and disks. Spinnaker's products include file system technology that it developed.

Network Appliance plans to operate Spinnaker as an engineering center in Pittsburgh, and expects the acquisition to close by January. On Nov. 18, Network Appliance plans to report financial results for its second quarter ended Oct. 31.