SanDisk boosts its enterprise footprint with $307m cash acquisition of SSD developer Smart Storage Systems
Flash memory giant SanDisk has announced it has entered a “definitive agreement” to acquire Smart Storage Systems, a company specializing in enterprise-grade solid-state drives (SSDs).
Founded in 1988, SanDisk is perhaps most well-known for its portable USB storage devices, though it also produces embedded flash drives, memory cards SSDs, and digital audio players. The California-based company’s says its decision to scoop up Smart, which produces both SATA and SAS SSD systems, better positions it to boost its existing enterprise portfolio.
SanDisk will pay around $307 million in cash, plus “certain equity-based incentive awards” to acquire Smart Storage Systems, a company that was previously acquired by two investment funds of Silver Lake back in 2011.
The deal has already been approved by the boards of directors on both sides, though the final acquisition is still subject to the usual closing conditions, which includes regulatory review and approval.
SanDisk drew in revenues of $5 billion in 2012, a 11% decrease on the previous 12 months, but this significant cash outlay indicates that it certainly sees the enterprise as where its growth can come from.
“SanDisk is excited to build upon its leadership position with its fourth acquisition in the enterprise storage market,” explains Sumit Sadana, executive vice president & chief strategy officer of SanDisk. “This acquisition enables SanDisk to address a $1.6 billion market opportunity in enterprise SATA products, and complements our strong enterprise SAS product portfolio. With this combination, SanDisk will have products qualified with six of the top seven storage OEMs worldwide.”
The deal will see 250 employees from SMART Storage Systems join SanDisk once the transaction is finalized later this year.
Feature Image Credit – STAN HONDA/AFP/Getty Images
