Eurologic Systems, the Dublin-based technology company, is in advanced takeover talks with Nasdaq-quoted firm Adaptec.

Adaptec develops software and hardware products for the data storage sector. The company is offering up to $50 million (€46.8 million) to acquire Eurologic Systems.

Eurologic is one of the Republic's biggest private technology firms and generated revenues of more than €100 million in the year to the end of June 2002.

Rather than choosing to float on the public markets like many of its peers during the bubble, Eurologic's chief executive, Mr John Maybury, decided to keep the firm in private hands.

But it is believed the sharp downturn in the data storage sector over the past three years has persuaded Eurologic to consider the offer by Adaptec.

Adaptec executives visited Eurologic's offices in Boxborough, Massachusetts, this week to interview its employees about joining Adaptec. One source quoted in the US e-zine Byte and Switch said it was already "a done deal".

"If they haven't actually signed papers, it's far enough down the road that there are people who know whether they're going to be kept or whether they're going to be let go," said the source, who didn't want to be named

One of the provisions of the deal, says the source, is that Adaptec would agree to not lay off anyone at Eurologic's Clonshaugh facility in Dublin for at least six months.

Adaptec, which is quoted on the Nasdaq stock exchange, had about $380 million cash on hand at the end of December 2002 and, according to analysts, is seeking to make acquisitions.

Mr Wes Cummins, a US analyst who covers Adaptec, said the proposed acquisition would fit Adaptec's strategy well.

However, both firms have been affected by the downturn in the market in the past two years. Just last month Adaptec made 10 per cent of its staff redundant and Eurologic has implemented similar cuts among its workforce.

Both Adaptec and Eurologic spokesmen and spokeswomen declined to comment when contacted by The Irish Times.