by Anton Shilov
07/02/2013 | 07:11 PM
SanDisk Corp., a leading maker of NAND flash-based products, has announced a definitive agreement to acquire Smart Storage Systems, a developer of enterprise solid state drives (SSDs) based on the Serial ATA and Serial Attached SCSI storage protocols.
Under the terms of the agreement, SanDisk will pay approximately $307 million in cash and certain equity-based incentive awards to acquire Smart Storage Systems, which is part of the Smart Worldwide Holdings portfolio of companies, acquired in 2011 by two related investment funds of Silver Lake. The transaction, which has been approved by the boards of directors of both companies, is subject to customary closing conditions, including regulatory review and approval, and it is expected to close in August, 2013. Approximately 250 employees of Smart Storage Systems will join SanDisk at the close of the transaction.
"SanDisk is excited to build upon its leadership position with its fourth acquisition in the enterprise storage market. This acquisition enables SanDisk to address a $1.6 billion market opportunity in enterprise SATA products, and complements our strong enterprise SAS product portfolio. With this combination, SanDisk will have products qualified with six of the top seven storage OEMs worldwide," said Sumit Sadana, executive vice president & chief strategy officer of SanDisk.
Smart Storage Systems’ SATA and SAS enterprise SSD offerings incorporate its award-winning Guardian Technology, which extends the native endurance of NAND flash memory, while improving reliability. This acquisition accelerates SanDisk’s enterprise business momentum by combining the benefits of Smart Storage Systems’ products, technology, and talent with the existing enterprise SSD and software product portfolios, vertical integration, scale, market reach and financial strength of SanDisk, to address fast-growing opportunities in enterprise storage.
Smart Storage Systems delivered approximately $25 million of revenue in its latest quarter ended May 31, 2013, continuing its rapid growth trajectory. The impact of this acquisition is expected to be slightly dilutive to SanDisk’s non-GAAP earnings per share in the second half of 2013 and become accretive to earnings in 2014.