Data Domain Files IPO, Cuts Deal with Quantum

Mar 31, 2007

Quantum will receive 390,000 shares of stock when the sale ensues, thanks to a pre-sale cross-licensing agreement with Data Domain.

Data Domain, which makes storage appliances for disk-based backup and network-based disaster recovery, filed a Form S-1 registration statement late on March 30 for an initial public offering of as much as $100 million in common stock.

Goldman Sachs, Morgan Stanley, Thomas Weisel Partners LLC Pacific Crest Securities will underwrite the IPO, according to a preliminary offering document filed with the Securities and Exchange Commission, Reuters reported.

Data Domain said it would have no comment on the filing until April 2, a company spokesperson told eWEEK.

Data Domain, based in Santa Clara, Calif., is seeking a Nasdaq listing under the symbol "DDUP," an abbreviation for "deduplication" - which is one of Data Domain's chief stocks in trade.

Data deduplication is a process which eliminates redundant data throughout the storage network, allowing for better system performance and efficiency. It is one of the hottest technologies in the storage market at this time.

There are several approaches to this process; Data Domain and others utilize one called "veriable length deduplication," which was patented by Quantum.

Quantum, based in San Jose, Calif., stands to profit handsomely when Data Domain begins selling its public stock. Data Domain and Quantum have a pre-ordained cross-licensing deal going into the IPO, according to the S-1 filing.

Quantum, which makes both digital tape and spinning disk storage products, will receive a total of 390,000 shares of Data Domain stock - pre-sale value, approximately $2.9 million - when it goes public. In return, Data Domain will continue to use Quantum's veriable length de-duplication process in its product line, with no legal strings attached.

"In the fourth quarter of 2006, we received an inquiry from Quantum Corporation regarding our interest in licensing certain patents that Quantum believed we may have previously incorporated into our products or may incorporate in the future," Data Domain states in the S-1 filing.

"As a result of our discussions with Quantum, which commenced in 2006, we entered into a patent cross-license agreement in March 2007, with an effective date of January 1, 2007.

"Under the terms of the cross-license, we issued Quantum 390,000 shares of our common stock in March 2007. We engaged an independent third-party valuation firm to assist us in valuing the shares of our common stock as of the date of issuance. Based on this valuation, the value of the common stock issued under the agreement was approximately $3.3 million," Data Domain stated.

"The $2.9 million balance of the settlement amount represents payment to Quantum for a release of all claims for any past acts or conduct, and we have recorded the amount as settlement expense in our consolidated statements of operations for the year ended December 31, 2006," Data Domain said.

The Data Domain board of directors approved the IPO filing on March 26.

Copyright 2007 by Ziff Davis Media, Distributed by United Press International

Explore further: EU Parliament votes to break up Google

add to favorites email to friend print save as pdf

Related Stories

NASA issues 'remastered' view of Jupiter's moon Europa

8 hours ago

(Phys.org) —Scientists have produced a new version of what is perhaps NASA's best view of Jupiter's ice-covered moon, Europa. The mosaic of color images was obtained in the late 1990s by NASA's Galileo ...

Dish restores Turner channels to lineup

9 hours ago

Turner Broadcasting channels such as Cartoon Network and CNN are back on the Dish network after being dropped from the satellite TV provider's lineup during contract talks.

LiquidPiston unveils quiet X Mini engine prototype

14 hours ago

LiquidPiston has a new X Mini engine which is a small 70 cubic centimeter gasoline powered "prototype. This is a quiet, four-stroke engine with near-zero vibration. The company said it can bring improvements ...

Recommended for you

EU Parliament votes to break up Google

11 hours ago

The European Parliament voted overwhelmingly for the break-up of Google Thursday in a largely symbolic vote that nevertheless cast another blow in the four-year standoff between Brussels and the US Internet ...

Toyota finds new air bag issue, recalls more cars

16 hours ago

Toyota Motor Corp. recalled more than 40,000 vehicles in Japan on Thursday as part of a worldwide scare over defective air bags and is investigating a new type of air bag problem that could lead to further recalls.

Netflix sues Yahoo CIO for alleged kickbacks

Nov 26, 2014

Netflix is suing a former company vice president who is now chief information officer at Yahoo, accusing him of receiving money from vendors he hired to work with the video streaming company.

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.