Seagate Acquires EVault for $185 Million

Having developed a successful business in hard disk drives, Seagate moved into online storage Thursday with the acquisition of privately held EVault for $185 million USD in cash.

The acquisition would close in Seagate's third fiscal quarter pending regulatory approval, which runs from January through March of next year.

Seagate characterized the buyout as part of a strategy to further its services arm, which is becoming a more lucrative part of the business. Being that EVault is in the storage industry itself, the Scotts Valley, Calif. company sees the move as an extension of its core business.

"Over the past three years, Seagate has been executing a strategy designed to broaden its customer base and increase growth opportunities by expanding beyond its core hard disc drive business into the broader storage solutions category," Seagate CEO Bill Watkins said.

Founded in 1997, EVault is based in Emeryville, Calif., employing about 250 people. It has approximately 8,500 customers, including companies and organizations in the financial, health care, and legal sectors.

The EVault acquisition is Seagate's third in the services category, following the purchase of content protection provider Mirra and data recovery company Action Front last year. All three companies are part of the Seagate Services group, aiming to provide on- and offline recovery and backup solutions.

According to analysts, a large underserved market exists for data recovery solutions among small and medium sized business. Seagate believes that it is well positioned to take advantage of this multi-billion dollar market.

"Our objective for Seagate Services is to become a leading provider of services to manage and protect our customers' digital content throughout its lifecycle," Watkins said.