OCZ acquires Indilinx for US$32 million
OCZ Technologies has announced their acquisition of Indilinx, one of the first companies that made controllers for SSDs - with their Barefoot controller perhaps being the most famous product. OCZ is acquiring Indilinx for US$32 million in OCZ stock, and the latter will stand to own 9.5% of the combined company. Read on for more details.
OCZ is acquiring Indilinx for US$32 million in OCZ stock, and the latter will stand to own 9.5% of the combined company, with OCZ gaining a set of 20 patents and patent applications related exclusively to the business as part of the transaction. As all current management and employees are kept, there is little change expected in the Korea-based Indilinx.
The name-dropped Tinkerbell controller hints at OCZ's desire to expand into the mobile space, and the upcoming SATA3 supporting Jetstream SSD controller from Indilinx should not be delayed by this acquisition much.
We look forward to see what the combined company will introduce into the competitive SSD market.
Press release as follows:-
Addition of High Performance Controller Technology and Firmware is Expected to Accelerate Storage Technology Innovation and Expand Product Portfolio
SAN JOSE, CA—March 14, 2011—OCZ Technology Group, Inc. (Nasdaq:OCZ),a leading provider of high-performance solid-state drives (SSDs) for computing devices and systems, today announced it has signed a definitive agreement to acquire Indilinx Co., Ltd, a privately held fabless provider of flash controller silicon and software for SSDs.
Indilinx is headquartered in South Korea and currently sells its line of flash controllers to SSD manufacturers and Tier One OEMs for use in a broad array of products addressing multiple markets, including embedded and industrial as well as laptops and PCs. Indilinx controllers have been deployed within OCZ's SSD products since December 2008, and are currently featured in the Z-Drive series of PCIe-based SSDs. Indilinx's technology is expected to enable OCZ to expand its presence into the embedded, hybrid storage, and industrial markets.
OCZ will gain substantial intellectual property from Indilinx including approximately 20 patents and patent applications related exclusively to the business as part of the transaction. For example, the acquisition is expected to extend OCZ's capabilities with advanced controller technology including Tinkerbell™, a high performance eMMC 4.4 x controller that replaces SSDs in consumer electronic devices such as smartphones, tablet PCs, GPS units, and netbooks. Tinkerbell improves the user experience in consumer mobile devices for applications such as internet browsing, gaming, social networking applications, emails, and multimedia play.
Following its acquisition by OCZ, Indilinx will continue to produce and supply its line of controller products to SSD manufacturers and OEMs on a global basis. The Indilinx controller business, and its 45 employees, will remain intact under the leadership of Bumsoo Kim, the founder and President of Indilinx, and Hyunmo Chung, Indilinx's Chief Technology Officer. OCZ will continue its own R&D program to develop new proprietary technologies and products to expand its own solid state drive offerings.
The Indilinx acquisition notwithstanding, OCZ plans to continue utilizing controllers from other manufacturers including long-term partner SandForce, who currently supplies SSD processors for a wide range of the Company's SSD products including the Vertex 2, Agility 2, RevoDrive, customizable Deneva enterprise drives, and the upcoming Vertex 3 family of SSDs.
"This transaction is an important step in OCZ's strategy and significantly enhances our ability to capitalize on the worldwide demand for Solid State Drives," said Ryan Petersen, CEO of OCZ Technology Group. "This combination brings together two organizations that are committed to advancing solid state drive design, and provides a unique opportunity for OCZ to increase both customer and shareholder value as well as expand our reach into embedded markets."
Under the terms of the agreement, OCZ will acquire Indilinx for approximately $32 million of OCZ common stock. Indilinx shareholders will own approximately 9.5% of the OCZ shares outstanding after issuance of the shares. The transaction has been approved by the board of directors of each company, and is expected to close within 30 days, subject to customary closing conditions, including regulatory approvals. OCZ expects the transaction to become accretive to its earnings per share toward the end of this fiscal year on a non-GAAP basis, excluding acquisition-related expenses, restructuring charges, and amortization of intangibles.