NetApp Said to Pay $120M for Onaro

At least two sources claim NetApp plans to pay $120 million in stock for Onaro, though the vendor isn't owning up. (A spokesman had not responded to inquiries at press time.)

What's more, one source claims NetApp was considering double that amount prior to a downward trend in its stock price that started mid-2007.

"That's my understanding... NetApp apparently had a $250 million stock offer on the table (unconfirmed) back before their stock tanked," writes one industry source, who asked not to be named, in an email this week.

NetApp's share price has fallen from high to mid $30s to the mid $20s range in the last several months. Management blames macroeconomic factors, including IT spending cutbacks, for the slowdown.

NetApp is hardly struggling, though. Sales continue in double digits. "We believe NTAP... should experience at least 20% Y/Y growth with operating margin close to 20%," writes Shebly Seyrafi of Caris & Company in a note today.The anonymous analyst quoted earlier also sees the Onaro buy as an aspect of progress in the enterprise space: "NetApp has seen Onaro is a definite player in the high end SAN space and I believe this gives NetApp more credibility with enterprise accounts."

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