June 16, 2014 – Today, SanDisk agreed to acquire Fusion-io in an all-cash deal that values the data storage company at about $1.1 billion. SanDisk will fund the acquisition with cash held on its balance sheet, and it is expected that the deal will finalize in the company’s fiscal third quarter.
Salt Lake City–based Fusion-io is a manufacturer of flash memory products and software used in data centers, while Milpitas, California–based SanDisk makes flash memory cards, such as the microSD cards that store files on smartphones and tablets. This acquisition will give SanDisk the chance to focus more on businesses as customers and to move away from what are perceived to be low-margin consumer goods.
“Fusion-io will accelerate our efforts to enable the flash-transformed data center, helping companies better manage increasingly heavy data workloads at a lower total cost of ownership,” SanDisk CEO Sanjay Mehrotra said in a statement.
SanDisk has stated that it will make a tender offer for all shares outstanding of Fusion-io for $11.25 a share. This is a 21% premium to Friday’s closing price, not a tardy piece of margin for Fusion-io investors and for a company that has been trading at a loss for the last five quarters in a row.
On the whole, this is a shrewd acquisition by SanDisk, as it will give it a valuable entry door into the data center, a market space that is burgeoning. Fusion-io, with its flash card, is poised to take a significant share of the flash acceleration market. With SanDisk’s FlashSoft product and a full solution to IO acceleration, SanDisk will be in direct competition with the current incumbents, which only concentrate on the vSphere space. FlashSoft already runs on multiple operating systems.
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