Sphere 3D today completed the divestment of its Overland Storage subsidiary. It is now effectively debt-free.
The same cannot be said for Overland and its Tandberg subsidary. This lossmaking concern has been saddled with $40m or so in debt, including $19m thrown into the pot by its former owner.
And although Overland is now independent the person who brought the company into Sphere 3D’s orbit is back in charge.
This is Eric Kelly, who today resigned as chairman and CEO of Sphere 3D. He is the CEO of Silicon Valley Technology Partners, an entity set up solely to buy Overland Storage from 3D Sphere. And with the transaction complete he assumes CEO and chairman posts at Overland.
We have covered in some detail the complex financial engineering that Sphere 3D needed to get creditor agreement for the sale. It’s a recommended read. But to the lay outsider, the transaction looks like Eric Kelly selling Overland to himself.
The Overland Storage website has not yet been updated to reflect this change in ownership.
No doubt Overland has a strategy to survive and thrive as a standalone business with its 500,000 installations. But SVTP might decide the best option is to become part of a larger business.
In August, private equity house StorCentric bought the Nexsan array business. Overland is perhaps a useful complementary business.