nStor Technologies, Inc., an innovative developer of storage-network solutions, announced that it has entered into a definitive agreement to sell its telemanagement subsidiary, Stonehouse Technologies, to Symphony Services Corporation, a leading provider of technology-based outsourcing services. The transaction is expected to close in the fourth quarter of this year.
The total purchase price payable to nStor of approximately $6.7 million consists of $5.6 million in cash and $1.1 million in promissory notes. The amount of the promissory notes may be reduced due to certain closing and other adjustments. The present management team of Stonehouse will remain in place after the closing. Proceeds from the sale will be used to fund nStor's storage-network solutions R&D initiatives, sales and marketing, and to strengthen the company's balance sheet.
According to Todd Gresham, nStor president and CEO, the transaction provides the company with sufficient working capital to meet key milestones and fuel its strategy to deliver cost-effective, straightforward storage solutions to small-to-mid-sized organizations. "The sale fits perfectly into our plans to provide the company with the liquidity that enables us to accelerate our sales and product development efforts while promoting the best interests of our customers and shareholders," he said.
Completion of the transaction is subject to approval by nStor stockholders and certain closing conditions. Current stockholders who own shares of nStor's common stock representing approximately 59 percent of its outstanding common stock have executed proxies in favor of the transaction. Upon closing, the company expects to report a loss of approximately $2.3 million from discontinued operations as a result of the sale of Stonehouse.
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