Toshiba Corp. on Monday announced that it has entered into an agreement with OCZ Technology Group to acquire substantially all the assets of OCZ Technology's SSD business. OCZ will continue to operate and serve existing and future customers during this process. Toshiba has agreed to provide OCZ with DIP (debtor-in-possession) financing to ensure that there is adequate capital and flash supply to support the business during the contemplated sale period.
"We are excited to participate in this opportunity. If our bid is successful, the combination of our leading NAND technology with OCZ's SSD expertise will allow us to further strengthen Toshiba's SSD business. We value OCZ's SSD business and technology in both the consumer and enterprise markets, and we are confident that it will reinforce our capabilities and help us to secure leadership in the SSD market," said Mr. Seiichi Mori, vice president of Toshiba's semiconductor and storage company and corporate vice president of Toshiba.
This acquisition will provide Toshiba with access to OCZ's proprietary controllers, firmware and software, as well as the teams responsible for bringing these solutions to market, in addition to OCZ's established brand and sales channels. This strategic opportunity will bring critical controller IP and NAND supply all under one global organization, allowing for an even more robust and competitive solid state solution offering for all of OCZ's and Toshiba's mutual customers moving forward.
"Over the past year, OCZ has dealt with numerous issues which have stressed the company's capital structure and operating model, posing a challenge to achieving near term profitability. The combination of NAND flash supply constraints and credit issues have impacted our ability to satisfy the demands of our customers; this combined with increased pricing pressure in our industry have contributed to our on-going operating losses. On an operational basis, we completed a complex investigation, several restructurings and a multi-year restatement that added significantly to our working capital requirements. We have been working diligently on this partnership with Toshiba and we believe that this is the best outcome under our current corporate conditions," stated Ralph Schmitt, CEO of OCZ.
The transaction will be completed through a sale and auction process pursuant to Section 363 of the U.S. bankruptcy code, and subject to approval by the bankruptcy court supervising OCZ Technology's chapter 11 bankruptcy. If Toshiba is selected as the successful bidder, subject to court and other regulatory approvals, the company expects to complete the acquisition in January 2014. In total, Toshiba will pay around $35 million for OCZ’s assets. This transaction has been approved by the board of directors of OCZ, and it is expected that the sale will close within approximately 60 days.
"OCZ looks forward to becoming part of Toshiba, a world leader in flash memory and storage solutions. Toshiba brings the necessary capital and NAND flash supply and expertise, which together with our leading edge solid state drive technology will enable us to provide client and enterprise customers with a very compelling total storage solution. This combination will make for an unstoppable force in the highly competitive SSD market," explained Ralph Schmitt.