Downturn bites as Plasmon UK enters administration

Downturn bites as Plasmon UK enters administration

The U.K. operations of archiving specialist Plasmon have been placed in administration, as the company continues takeover talks with a potential buyer.

In a statement to the London Stock Exchange (LSE) last month, Steven Murphy, president and CEO of Plasmon revealed that earlier in the year, the company had undertaken a 'strategic business plan' that included new products for the changing face of the enterprise archiving sector.

The company consequently launched a new range of archiving solutions that integrated server-based intelligence, magnetic disk, and its UDO optical media. Although the company apparently experienced a rise in its global sales pipeline, it "did not achieve the increase in revenues necessary to support the organic development of our strategic plan."

Plasmon admitted it had been in discussions with a U.S. based private equity firm, which was offering to provide a "significant new investment (about $25 million or £14.4 million), but last month it announced these discussions were terminated. Plasmon subsequently requested an immediate suspension of the listing of its shares on the London Stock Exchange.

Members of Kroll's Corporate Advisory and Restructuring Group were appointed this week as joint administrators of the company, and are continuing to trade the company's U.K. and European sales and marketing division, alongside the company's U.S. subsidiary, Plasmon Inc. This tactic, they say, is allowing the company to continue the sale and support of its products worldwide, whilst a going concern sale of the business is explored.

The Administrators also say that they are in discussions with a number of interested parties and are hopeful that a sale of the remaining business can be achieved in a relatively short time frame.

Techworld meanwhile has been informed that a third (about 50) of Plasmon's 300 global staff have already been made redundant, mostly in the U.K. It also seems that most of the losses have come from the software and UDO media teams, as the company rids itself of elements considered non essential to its primary archival storage business.

Techworld was also told that the administration process is not a surprising move, although it is dramatic, and should not be interpreted as a sign that Plasmon has gone to the wall. Instead, it is apparently part of the ordered process as the company restructures itself in preparation of being acquired, hopefully in the next few days.

That said, it remains to be seen how UK Plasmon customers, who now effectively have no local subsidiary with which to deal, will react.

Meanwhile, Plasmon has recently announced the joint development of a new Plasmon optical library that provides fiber channel connectivity to IBM customers. As part of this development effort, Plasmon and IBM will provide IBM Power Systems customers running IBM i, with an optical archiving option.

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