"[SanDisk] was already positioning the company as more of a enterprise storage company ... what the Fusion-io (FIO +22.4%) deal does is it enhances that significantly," says Cross Research's Steven Fox, praising SanDisk's (SNDK +3.6%) $1.1B buy.
Summit Research likes the fact SanDisk is picking up a blue-chip client list that includes Apple and Facebook, though those two companies have been paring orders lately. Other clients of Fusion-io's PCIe server flash modules include Pandora, Salesforce, Alibaba, and Baidu.
SanDisk is paying only 2.5x FY15E (ends June '15) sales exc. cash. Needham likes the valuation, and notes the deal makes SanDisk the #2 enterprise SSD vendor (16%+ share), behind Intel. Gartner recently estimated SanDisk and Fusion-io were #4 and #5, behind Intel, Samsung, and Western Digital.
Even before the deal, SanDisk was aiming for $1B in 2016 enterprise sales. Adding Fusion-io allows SanDisk to pair its ability to source high-end NAND flash chips at cost with FIO's high-performance/low-latency server flash IP.
SanDisk made fresh highs today. FIO closed 1% above SanDisk's $11.25/share offer price on hopes for a higher bid. Seagate recently bought Avago/LSI's PCIe server flash unit for $450M.