The deal, which is expected to be finalised in the fourth quarter of this year, involves Quantum acquiring all of Benchmark, including its tape drive and tape media products, in a stock and cash transaction. The Benchmark products will be integrated into Quantum's DLTtape Group immediately and will continue to be manufactured through Benchmark's current outsourcing partners, Mitsumi Electric and Beyonics Technology.
Quantum will give Benchmark's equity holders approximately 13.1 million shares of Quantum stock and $11m (£7m) in cash. Additionally, Quantum, which previously owned a 20% share of Benchmark, will give the other equity holders up to 1.9 million shares of Quantum stock if the DLTtape Group achieves certain performance milestones in sales of Benchmark's products in the first year after the acquisition is completed.
Quantum officials said the acquisition would enable it to offer a broader line of tape drives, ranging from 80Gbytes to 320Gbytes of capacity.
The company has also announced that it intends to outsource its current tape drive manufacturing to Jabil Circuit, an electronic manufacturing service provider. Quantum officials said the agreement with Jabil would allow it to reduce its manufacturing costs and focus its resources on developing new technologies.