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Tintri rescued by DDN just hours after filing for Chapter 11
Customer support to be saved, roadmap assurances delivered
Exclusive DataDirect Networks (DDN) has come to the rescue of Tintri just hours after the array maker filed for bankruptcy in the US under Chapter 11.
Tintri had lodged the relevant paperwork in the Delaware Bankruptcy Court today, and the papers were just made available to the public.
But as the ink was still drying, DDN confirmed it has entered into a "non-binding letter of intent agreement to acquire substantially all of the assets of Tintri" for an undisclosed sum.
In a statement sent to The Register, Alex Bouzari, DDN CEO and Co-Founder, said:
"DDN is working with Tintri's co-founders, team members, advisors and creditors to develop a winning plan designed to provide Tintri's customers with continuity in support of their installed base as well as a winning roadmap for their long-term requirements."
The virtualization, analytics and VM automation tech developed by Tintri will be added to DDN's family of storage solutions, DDN added.
In Tintri's voluntary petition (PDF), signed by CTO and co-founder Kieran Harty, it had confirmed that funds of between $10m and $50m were to be made available to distribute among unsecured creditors, of whom there are between 1,000 and 5,000. Contract manufacturer Flextronics is the largest creditor, owed $4.5m, and salesforce.com is next, owed $492,000. The entire list of creditors totals 73 pages.
Four VCs that each own 10 per cent or more of Tintri were named: New Enterprise Associated, Silver Lake Kraftwerk, Insight Venture Partners and Lightspeed Venture Partners.
The filing further revealed that Tintri’s board decided to file for bankruptcy on July 6. Robert Duffy of Berkeley Research Group had been appointed as Tintri’s chief restructuring officer.
In a statement, Duffy said:
Ultimately, the company's sales levels have not experienced a level of growth sufficient to address its cash burn rate and sustain its business. The company's IPO raised less capital than anticipated. Tintri's orders for new products declined, it lost a few key customers and, consequently, its declining revenues led to the company's difficulties in meeting day-to-day expenses, as well as long-term debt obligations.
A few months after its IPO, in December 2017, Tintri announced that it was in the process of considering strategic options and had retained investment bank advisors to assist it in this process.
Tintri's dire financial state led existing and potential customers and suppliers to express concerns regarding its liquidity, which negatively impacted the firm's ability to sell and ship products and services, the filing stated.
Due to continued deterioration in the cashflow, Tintri and its backers decided the best course of action under the circumstances was file a Chapter 11 petition and seek the Court's approval for the prompt sale of substantially all its assets.
The company wanted to sell itself as a going concern, but if that failed, a buyer was to be sought for the IP and other assets.
It has been a busy year for Tintri: the company floated on Nasdaq in June 2017 for $7 a share, lower than earlier expectations, and signs that not all was well soon emerged as results took a downturn and a restructuring plan was hit upon as losses mounted. Execs then walked.
Today's developments come less than a fortnight after Tintri laid off 80 per cent of its workforce - 200 people - and admitted it was set to run out of cash by the end of the June.
It closed EMEA ops, leaving customers without a support function, and according to numerous sources did not pay employees in the UK, Germany and the Netherlands for June.
Tintri has some 20 employees left, according to the bankruptcy petition, and sources previously told us they are all based in the US.
Earlier today, before the bankruptcy filing and DDN chapters emerged, Nasdaq had warned Tintri that its failure to file the latest financial results would have seen its shares kicked off the exchange by 12 July. Now that matters not.
And so ends the story of Tintri, as was, a business that developed hybrid and all-flash arrays that some customers seemed to love, but which perhaps weren't sold very effectively. The deal with DDN should, if it is concluded, bring some certainty for customers. ®