SanDisk takes over money losing Fusion-IO at a big premium to increase its hold on the quickly consolidating NAND market.
SanDisk announced Tuesday that it has reached a deal to purchase enterprise SSD maker Fusion-IO in an all-cash deal worth $1.1 billion or $11.25 a share — a 25 percent premium over the company’s closing price on Friday.
To some, such a premium on a company that has struggled to remain profitable might be curious. But considering the trend of consolidation within the memory market during the last half-decade, particularly the acquisition of Avago by Seagate, this comes as a strategic move to snap up one of the few remaining flash memory companies.
“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.
According to statements make in the press by Fusion-IO executives, Fusion-IO will retain its name and brand whilst using SanDisk as a sole supplier of NAND memory.
The deal is expected to close in 2015, after approval from regulators.