Fabrik to buy SimpleTech, get big fast

Call it a case of a minnow swallowing the whale! Fabrik, a San Mateo-based storage and software start-up backed by the likes of Intel Capital, is close to buying SimpleTech’s consumer storage device business and the brand name for an undisclosed amount of money.

While the company officials declined to comment, sources say that the deal is all but done and the announcement is going to come soon.

SimpleTech Inc. recently changed its name to STEC, and has decided to focus on its industrial memory business. STEC is divesting the consumer drive business, and according to a press release they have completed the sales of assets of its consumer division including the name “SimpleTech” for approximately $43 million and assumption of about $13.6 million in liabilities.

According to a guidance given by the company in December, the revenues for the fourth quarter 2006 were going to be between $105 million and $107 million. Consumer division accounts for about 40% of their sales. For the prior three quarters the company’s consumer division accounted for about $100 million in sales. In that sense, Fabrik could easily be looking at annual sales of $150 million in 2007.

So far, it has worked with partners like Maxtor to push its software; the SimpleTech deal, when it closes, will give Fabrik a dedicated outlet for its software, and can push its own branded devices to the market.

SimpleTech used to sell PininFarina-designed USB external storage drives, and that is another brand Fabrik could add to its portfolio of products. It has been one of the big sellers for SimpleTech.