SAN DIEGO — Cipher Data Products has agreed to pay $6.3 million in cash and as much as $8 million in notes and royalties for a 90% interest in Optimem, a Xerox Corp. subsidiary in Sunnyvale that produces optical disk drive products, company officials said Wednesday.
The acquisition is "consistent" with Cipher's strategy of remaining a "major supplier of removable-media storage devices and subsystems," according to Cipher Chairman and Chief Executive Don M. Muller.
Cipher Data paid "a very fair price" for Optimem, Michael Murphy, editor of the San Francisco-based California Technology Stock Letter, suggested. "No one's going to say they paid too much. Although the acquisition is not going to have a dramatic near-term effect on Cipher, it was a very intelligent strategic move."
By acquiring Optimem, Cipher Data will be able to "participate in pioneering disk drives that focus on removeable media," Muller said.