updated 11:46 am EDT, Tue July 2, 2013
Acquisition to bolster existing SanDisk enterprise storage devices
Storage manufacturer SanDisk is acquiring enterprise solid state drive developer Smart Storage Systems. The "definitive agreement" to purchase the company sees SanDisk paying approximately $307 million in cash and "equity-based incentive awards" to Silver Lake Partners, with the boardroom-approved deal expected to be completed in August.
The acquisition will help SanDisk expand its enterprise services, aimed towards large organizations and entities with data centers. As well as the 250-employee roster, the Smart buy will also see SanDisk gain access to the company's Guardian Technology, which it uses to prolong the life and improve reliability of NAND flash memory. While this is primarily focused at enterprise usage, the same technology could make an appearance in consumer-grade products in the future.
SanDisk executive vice president and chief strategy officer Sumit Sadana said that the purchase allows the company "to address a $1.6 billion market opportunity in enterprise SATA products, and compliments our strong enterprise SAS product portfolio. With this combination, SanDisk will have products qualified with six of the top seven storage OEMs worldwide."
Smart generated revenues in the region of $25 million in the last quarter, an improvement on the previous quarter. SanDisk states that the acquisition will impact the company's non-GAAP earnings per share for the second half of 2013, but it will increase earnings in 2014.