SanDisk Corporation, a world-leading producer of flash storage devices, has announced an agreement to acquire Fusion-io, a top developer of flash-based PCIe storage hardware and software products for enterprise and datacenter applications, in an all-cash transaction reportedly valued at approximately $1.1 billion. Under the terms of the agreement, SanDisk will tender an offer for all outstanding shares of Fusion-io stock for $11.25 per share in cash. As of posting time for this article, Fusion-io (FIO) shares were up 22.74% to $11.39 per share. SanDisk intends to fund the acquisition with cash currently available on their balance sheet.
According to Sanjay Mehrota, president and CEO of SanDisk, “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. Customers will benefit from the addition of Fusion-io’s leading PCIe solutions to SanDisk’s vertically-integrated business model. We look forward to working with the world-class engineering and go-to-market teams from Fusion-io to provide high-value solutions to customers around the world.”
This makes the third significant enterprise storage hardware and/or software producer acquired by SanDisk in recent history. SanDisk acquired caching software specialist FlashSoft in February of 2012, and more recently acquired major enterprise storage developer SMART Storage Systems in July of 2013. This third acquisition gives SanDisk an even stronger presence in the enterprise and datacenter storage arena, which has been identified as the single strongest growth area for flash storage for the foreseeable future.
The acquisition has already been approved by the boards of directors of both companies, and is anticipated to close in SanDisk’s fiscal Q3 of 2014. SanDisk anticipates seeing a positive return on this investment as early as the second half of their fiscal 2015. The transaction is subject to standard and customary closing conditions, as well as clearance from the pertinent regulatory authorities.
Shane Robinson, chairman and CEO of Fusion-io, states that “This transaction represents a compelling opportunity for Fusion-io’s employees, customers and shareholders. Fusion-io’s innovative hardware and software solutions will be augmented by SanDisk’s worldwide scale and vertical integration, enabling a combined company that can offer an even more compelling value proposition for customers and partners.”
SanDisk is utilizing Goldman, Sachs & Co. to act as financial advisors for this acquisition, and the law firm of Skadden, Arps, Slate, Meagher & Flom as legal advisors. Fusion-io’s financial interests are being represented by Qatalyst Partners, with legal advice coming from Wilson Sonsini Goodrich & Rosati. SanDisk continues to strengthen its position as one of the most dominant forces in both the enterprise and consumer flash storage markets.