Ashraf Eassa • 22 Comments
Stephen Simpson, CFA
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.
Dec. 16, 2013, 8:29 AM
- The $6.6B purchase by Avago Technologies (AVGO) of LSI Corp. (LSI) is a big bet that the company can jump right into networking and storage chips while also realizing some synergies on the cost side.
- LSI lands a deal price of $11.15 per share to mark heights that shares haven't seen since 2006.
- Early analyst feedback on the deal is positive due to the complementary nature of the companies, but investors haven't had their say yet with Avago still halted on the Nasdaq.
Dec. 16, 2013, 8:13 AM
Oct. 26, 2011, 4:57 PM
Sep. 12, 2011, 7:33 AM
Broadcom (BRCM) agrees to buy NetLogic Microsystems (NETL) for $3.7B in a definitive merger agreement expected to close in the first half of 2012. The firm calls the deal a "strategic fit" that should deliver financial results. Rivals in the space potentially seeing interest: LSI, CAVM, MRVL, VTSS, FSL, PMCS, AMCC.| Sep. 12, 2011, 7:33 AM