Jul. 23, 2014, 9:37 AM
- Just 5 weeks after announcing its $11.25/share purchase of Fusion-io (NYSE:FIO), SanDisk (NASDAQ:SNDK) has closed the deal.
- SanDisk plans a restructuring for Fusion-io, and to record restructuring, integration, and transaction costs. These costs are expected to impact non-GAAP earnings by $35M in Q3, and $15M in Q4.
- Fusion-io is also expected to record operating losses in the near-term. But SanDisk expects the deal to become accretive in 2H15.
- Previous: Street commentary on the deal, Fusion-io's M&A talks
Jun. 25, 2014, 5:24 PM
- Before agreeing to SanDisk's (SNDK +0.9%) $11.25/share offer, Fusion-io (FIO -2.2%) talked to 11 potential acquirers in total, SEC filings indicate.
- Two of the potential acquirers, referred to as Party A and Party F, withdrew from talks in May after showing initial interest. SanDisk showed initial interest last October, halted talks in December, and came back to the table in May before closing a deal (after securing a discount?).
- A SanDisk exec: "There were a lot of things that we were assessing ... Fusion-io was certainly one option in meeting our business goals, but not the only option."
- Meanwhile, Fusion-io COO Lance Smith talks up the value of pairing his company's PCIe server flash IP with SanDisk's NAND fabs, "Having access to the fab and suiting the fab output to the business at hand gives you significant leverage in the marketplace."
- Fusion-io shares fell $0.26 today in response to the filings. They're now $0.11 above SanDisk's offer price.
- Previous: Street applauds SanDisk/Fusion-io's price, synergies
Jun. 16, 2014, 4:47 PM
- "[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.
Jun. 16, 2014, 7:56 AM
- SanDisk (SNDK) agrees to acquire Fusion-io (FIO) in an all-cash transaction valued at $1.1B.
- The $11.25 per share offer is expected to close during SanDisk's FQ3.
- The combination of the two tech companies is forecast to be accretive in the second half of SanDisk's FY15.
- FIO +23.1% premarket to $11.42.
May 29, 2014, 9:34 AM
- Seagate (STX) is expanding its flash storage lineup - generally seen as a weakness as flash encroaches on hard drives - in a big way by acquiring LSI's PCIe server flash storage module/flash controller chip unit from new LSI parent Avago (AVGO) for $450M in cash.
- Seagate, which already offers SSDs, notes the LSI unit is the #2 player in the PCIe flash market - Fusion-io (FIO +1%) is the largest - and that its offerings in the space are optimized for cloud/hyperscale deployments - Fusion-io also has a keen interest in this area. The unit's SandForce controllers have a number of SSD design wins.
- Seagate expects its enterprise SSD and controller ops to produce at least $150M in revenue in FY15 (ends June '15), albeit with an op. margin headwind of $30M-$40M. Better profitability is expected in FY16.
- The deal follows a string of flash storage acquisitions from archrival Western Digital: PCIe flash vendor Virident, SSD vendor sTec, and SSD caching software startup Velobit.
- It appears to remove one more potential suitor for Fusion-io, long the subject of M&A speculation.
Feb. 20, 2014, 4:39 PM
- Violin Memory (VMEM), under new management, coming off a rough 2013, and reportedly talking with suitors, says it has implemented job cuts that have lowered its headcount to 380 employees from an Oct. 31 level of 483.
- The company also says it's exploring options for its PCIe server flash memory module ops (the product of the Velocity acquisition) to focus on "markets where Violin has proven technology leadership and significant growth opportunities." Violin expects to finish its review by the end of FQ1 (ends in April), and achieve annual opex savings of $10M/year as a result.
- Violin's final decision for its PCIe business stands to have implications for Fusion-io (FIO), the most prominent independent player in this space.
- Violin's FQ4 report is due on March 6.
- VMEM +2.3% AH
Sep. 30, 2013, 2:37 PM
- A Bloomberg column discusses the possibility of Seagate (STX +1.3%) acquiring Fusion-io (FIO +1.9%) in response to Western Digital's acquisition of Fusion-io server flash module rival (and Seagate partner) Virident. M&A hopes, together with the steep multiples paid by Western, led Fusion-io shares to fly higher when the Virident deal was announced.
- No new information is provided in the Bloomberg column. Earlier this month, Seagate CEO Steve Luczo admitted Seagate "[needs] some technology .... on the software side" to flesh out its cloud storage offerings (many Web/cloud firms are embracing flash), but added valuations "[seem] a little frothy."
- Meanwhile, Fusion-io rival Violin Memory (VMEM +5%) is bouncing a bit after tumbling post-IPO on Friday; shares are still down 18% from their $9 IPO price.
- Violin CEO Don Basile, who was once Fusion-io's CEO, has been busy defending the company. He asserts Violin tops IDC and Gartner's rankings of flash array vendors, and that the company's proprietary flash controller ICs help it stand out (Fusion-io's module also use proprietary controllers). Regarding the wind-down of the H-P reseller deal, Basile declares the IT giant hasn't been a "meaningful" revenue contributor for seven quarters.
Sep. 11, 2013, 12:10 PM
- After taking a breather yesterday (in spite of a Piper upgrade), Fusion-io (FIO +15.4%) is flying higher once again thanks to M&A hopes. Pac Crest argues recent deals - Seagate/Virident and Cisco/Whiptail - imply a buyout price of $22-$27/share.
- Shares +40% from Friday's close. With 31.6% of the float shorted as of Aug. 15, it's a safe bet short-covering has much to do with this week's rally.
- Previous: I, II
Sep. 10, 2013, 8:31 AM
- Cisco (CSCO) intends to acquire privately held Whiptail, a provider of solid-state memory systems, for $415M.
- Whiptail's technology enables organizations "to simplify data center and virtualized environments, and process more data in less time," Cisco said. "Whiptal will strengthen Cisco's Unified Computing System strategy and enhance application performance."
- Cisco's acquisition follows Western Digital's announcement yesterday that it's buying Virident Systems for $685M in a deal that extends Western Digital's presence in the market for server-based flash storage. The deal sent shares of Fusion-io (FIO) soaring 26% yesterday on hopes that it may be bought and they're now +4.7%. (PR)
Sep. 9, 2013, 5:33 PM
- Craig-Hallum and FBN have upgraded Fusion-io (FIO +25.9%) in the wake of Western Digital's $685M deal to acquire Fusion-io rival Virident, arguing the odds the server flash module vendor will receive a buyout offer have risen.
- Like others, Craig-Hallum's Rajesh Ghai views Seagate (STX +1.8%), which is about to see its reseller deal with Virident unravel as the startup becomes a division of its biggest rival, is viewed as the most likely candidate to make a bid. However, he also names Samsung and Micron as potential suitors.
- FBN's Shelby Seyrafi: "WDC is paying $645 million [net of cash] for a PCIe SSD company with little revenue, while FIO had an enterprise value on Friday of $1.2 billion and had $432 million in revenue last year."
- Lazard's Edward Parker, who has been bullish on FIO for some time, says checks point to "substantial hyperscale design win activity in 2014, with Fusion-io and Virident both at the top of a short list of participants."
- Fusion-io's top two hyperscale customers, Apple and Facebook, have been paring their orders, something that definitely hasn't gone unnoticed by investors. But the company has also boasted of orders from other big tech/Internet names, such as Pandora, Salesforce, LinkedIn, and Alibaba.
- 31.6% of the float was shorted as of Aug. 15.
- Previous: Fusion-io soars in response to WDC's purchase of Virident
Sep. 9, 2013, 10:26 AM
- Virident, like Fusion-io (FIO +11.3%), offers PCI-Express-based server flash memory modules meant for performance-intensive applications. And beaten-down Fusion-io has been the subject of plenty of M&A speculation over the last two years.
- Virident asserts its FlashMAX II PCI-Express modules offer 2x the performance of rival solutions.The company also provides FlashMAX Connect, an innovative software solution for allowing FlashMAX II modules to be clustered, to mirror/replicate content, and to act as caches for 3rd-party storage.
- Western Digital (WDC -0.5%) should be able to greatly expand Virident's distribution. The purchase comes less than 3 months after WDC announced it's buying enterprise SSD vendor sTec for $207M.
- In addition to Fusion-io, Virident competes against EMC, which offers its XtremSF flash modules and other flash storage products, and private flash storage system vendors such as Nimble Storage and Violin Memory.
- Interestingly, Western Digital archrival Seagate (STX -0.8%) recently invested $40M in Virident and struck a reseller deal with the company. Though Seagate is probably getting a good return on its investment, it can't be happy to see Virident fall into WDC's arms. Will it counter by making a play for Fusion-io?
- Previous: Western Digital buying Virident for $685M
Jun. 24, 2013, 9:19 AM
OCZ (OCZ) +10.2% and Fusion-io (FIO) +2.2% following news Western Digital is acquiring enterprise solid-state drive vendor sTec at a 91% premium to Friday's close. Both OCZ and Fusion-io have often been the subjects of buyout speculation; a couple of OCZ rumors have involved Western Digital archrival Seagate. Fusion-io has more of an enterprise focus than OCZ, but new CEO Shane Robison recently declared the company isn't for sale.| Jun. 24, 2013, 9:19 AM
May 30, 2013, 1:12 PMMore on Credit Suisse's upgrade of Fusion-io (FIO +6.1%): Analyst Kulbinder Garcha is adding his name to the list of those who see the server flash module maker as a buyout candidate. Garcha views Cisco, EMC, and Intel as likely suitors, and also mentions Oracle, NetApp, IBM, and Samsung as candidates. The fact Fusion-io depends on OEM relationships with a variety of server/storage vendors could make some OEMs think twice about a bid. Intel doesn't have to worry about this issue, but it has begun selling competing hardware. | May 30, 2013, 1:12 PM
May 22, 2013, 11:38 AM
Fusion-io (FIO +0.4%) is the subject of renewed M&A speculation, as Bloomberg points to the record low in FIO's price-sales ratio while prospects remain intact, with sales projected to more than double through 2015 as more data centers use FIO’s flash-memory technology. "Any large hardware provider who has storage solutions could find value in them," an analyst says, particularly after the recent break in valuation.| May 22, 2013, 11:38 AM
May 9, 2013, 2:53 PM
Fusion-io (FIO +0.2%) isn't for sale, states new CEO Shane Robison as he tries to clear the air about the company's surprising management shakeup. The company has long been the subject of M&A speculation, with some of the reports more far-fetched than others. Robison suggests the shakeup is aimed at taking Fusion-io to the next level (read: growing its enterprise base), rather than the result of a strategy disagreement. Fusion-io has come to embrace a software-driven strategy over the last 12 months, something Robison appears to be on board with. (SiliconAngle report)| May 9, 2013, 2:53 PM | 2 Comments
Apr. 24, 2013, 5:24 PM
Fusion-io (FIO) is now up 10.9% AH following its FQ3 beat and strong FQ4 guidance. FQ3 gross margin was 59.9%, near the high end of a guidance range of 58%-60%; it's expected to drop in FQ4 to 56%-58%. The NexGen acquisition takes Fusion-io into the market for standalone storage gear, and does so in a surprising way, given the startup's products package Fusion-io's flash modules and software with standard hard drives. It's worth noting NexGen's products are aimed at SMBs - thus far, Fusion-io's modules have largely been sold to enterprises and major Internet services firms. (PR)| Apr. 24, 2013, 5:24 PM