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, 12:45 PM
Jun. 16, 2014, 9:15 AM
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.
Jun. 13, 2014, 1:17 PM
- Roth has started Fusion-io (FIO +4%) with a Buy and $12.50 PT. Shares are once more positive on the year, but continue to trade at a small fraction of their 2011/2012 levels.
- With the list of potential suitors apparently dwindling, the bull case for Fusion-io increasingly revolves around the company's efforts to ramp sales to enterprises, and to Web/cloud clients (Pandora, Salesforce, Alibaba, etc.) not named Apple or Facebook.
May 30, 2014, 1:49 PM
- High-beta enterprise tech names are particularly well-represented in a momentum stock selloff as Splunk, Nimble Storage, Violin Memory, and (especially) Infoblox fall post-earnings.
- Analytics/data visualization software vendors Tableau (DATA -6.5%) and Qlik (QLIK -4.1%), often hyped (like Splunk) as big data plays, are among the decliners. As is flash storage vendor Fusion-io (FIO -5.4%), which competes with Violin and (to a lesser extent) Nimble. But they're far from the only ones.
- Security decliners: FEYE -6.5%. CUDA -8.4%. IMPV -7.4%. PFPT -5.7%. VDSI -4%. QLYS -4.5%.
- Cloud software decliners: WDAY -4.1%. JIVE -4.3%. MKTO -7.4%. NOW -4.9%. TNGO -5.1%. CSLT -6.9%. TXTR -6.7%. RALY -11.6%.
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.
May 12, 2014, 12:19 PM
- Citing checks that point storage industry weakness and tougher competition, Raymond James has cut NetApp (NTAP -1.6%) to Market Perform ahead of its May 21 FQ4 report. Shares are lower on an up day for tech.
- RJ's downgrade comes 5 days after Wells Fargo cut its NetApp valuation range due to competitive worries - the firm is on edge over lengthening sales cycles caused by the evaluation of rival storage arrays and cloud solutions, and "the heightening trend of more workload-specific arrays." However, it still considered risk/reward to be "fairly balanced," given 40% of NetApp's market cap is covered by net cash.
- NetApp slipped last month after EMC reported soft storage sales, including a 22% Y/Y drop in high-end storage sales. Since then, EMC has announced a revamp for its mid-range VNX arrays (they compete against NetApp's bread-and-butter FAS systems), as well as Project Liberty, a software solution that allows VNX arrays to be built on commodity hardware.
- While NetApp trades lower, flash storage vendors Fusion-io (FIO +5%) and Violin Memory (VMEM +6.2%) are both shooting higher as Nimble Storage posts double-digit gains in response to two upgrades. Both companies went into trading close to their 52-week lows.
Apr. 24, 2014, 12:46 PM
Apr. 23, 2014, 5:38 PM
Apr. 23, 2014, 5:27 PM
- F5 (FFIV) expects FQ3 revenue of $428M-$438M and EPS of $1.33-$1.36, largely favorable to a consensus of $428.7M and $1.33. Shares +2.7% AH. (FQ2 results, PR)
- Fusion-io (FIO) expects FQ4 revenue to be in-line or up slightly Q/Q relative to FQ3's $100.5M. That suggests revenue will miss a consensus of $107.5M. Gross margin is expected to be in a range of 52%-54% vs. 52.4% in FQ3., and op. margin in a range of -13% to -17% vs. FQ3's -16.7%. Shares -3.9% AH. (FQ3 results, PR)
- Citrix (CTXS) expects Q2 revenue of $765M-$775M and EPS of $0.57-$0.59, below a consensus of $785.1M and $0.68. But full-year guidance is better: 8.5%-10% revenue growth and EPS of $2.90-$2.95 vs. a consensus for 9.1% growth and EPS of $2.91. Shares +4.7% AH. (Q1 results, PR)
Apr. 23, 2014, 4:10 PM
- Fusion-io, Inc. (FIO): FQ3 EPS of -$0.10 in-line.
- Revenue of $100.5M (+14.7% Y/Y) beats by $3.8M.
- Shares -3.1%.
Apr. 23, 2014, 11:31 AM
- NetApp (NTAP -1.1%), Fusion-io (FIO -2.1%), and Nimble Storage (NMBL -3.2%) are all lower after EMC reported a 3% revenue drop for its core Information Storage ops, and a 7% drop in the unit's product sales.
- EMC's high-end storage sales were particularly weak, falling 22% Y/Y. On the other hand, emerging storage sales (inc. flash storage, object storage, and scale-out NAS) rose 81%, and unified storage and backup/recovery sales rose 4%.
- NetApp is EMC's biggest rival in the unified storage space. All three of the aforementioned companies compete to varying degrees against products offered by EMC's emerging storage ops.
- EMC's numbers follow a relatively healthy Q4 for the storage industry. But they also come amid concerns about the long-term impact of cloud infrastructure services on traditional storage arrays from the likes of EMC, IBM, NetApp, and H-P - concerns heightened by an ongoing price war.
- Separately, upstart flash array vendor Pure Storage has raised $225M at a $3B valuation. CEO Scott Dietzen says Pure, which asserts its flash arrays are cheaper than rival solutions and offer a superior data-reduction feature set, isn't in any rush to go public.
- Nutanix, a maker of clustered server/storage systems for web-scale data centers, raised funding earlier this year at a ~$1B valuation.
Apr. 23, 2014, 12:10 AM
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