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Well here's a bit of a shocker. A company called LSI has signed a definitive agreement to acquire SandForce, makers of all those high-speed solid state drive (SSD) controllers that are so popular in the performance category. Most people assumed it would be a company like Intel, or even Corsair who would eventually swoop in and scoop SandForce up, just as OCZ did with Indilinx.
But it was LSI who made the move, agreeing to pay approximately $322 million in cash and assume in the neighborhood of $48 million of unvested stock options and restricted shares held by SandForce employees. In recent years, LSI has focused most of its attention on networking and storage solutions for the enterprise.
"Flash-based solutions are critical for accelerating application performance in servers, storage and client devices," said Abhi Talwalkar, LSI president and chief executive officer. "Adding SandForce’s technology to LSI’s broad storage portfolio is consistent with our mission to accelerate storage and networking. The acquisition represents a significant, rapidly growing market opportunity for LSI over the next several years."
LSI is at least somewhat familiar with SandForce's technology, which powers the company's WarpDrive (pictured above) family of products. Once the acquisition is finalized, LSI envisions itself becoming an industry leader in the high-volume flash storage processor market space for ultrabook, notebook, and enterprise SSD and flash solutions.
The transaction is expected to close in the first quarter of 2012.
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Wily_One
October 28, 2011 at 8:02pm
LSI has been around a long time, but probably unknown to most consumers. I do not fear this acquisition.
Ilander
October 27, 2011 at 1:08pm
So, the asking price is where it is, because in the high-end business-class server-oriented SSD market, FusionIO completely dominates with their PCI-express based products. Sandforce is probably the best word to have printed on the box of your SATA SSD, but, up in the expensive higher end compute market, it doesn't mean much.
So, that's why it's not worth more...and honestly, Intel made a mistake not moving faster and trying harder here, since their SSD strategy of working bottom up (starting with consumer grade) complements that. Honestly, Intel has other things on their mind (see: ARM), but a missed opportunity, nonetheless.
Good luck to LSI; we'll see if they can get some footholds versus FusionIO in the server market with the new acquisition, and hopefully, they won't forget about the consumer end either.
chronium
October 27, 2011 at 7:38am
I'm actually more surprised at how cheaply Sandforce sold for. They could have easily gotten a few billion dollars if they tried to sell themselves to a company already in the SSD business.
Paul_Lilly
October 27, 2011 at 8:40am
I was a bit surprised at first as well, until I looked up the purchase price of Indilinx. OCZ forked over just $32 million of OCZ common stock in that acquisition. By that standard, SandForce made out pretty well here.
AETAaAS
October 27, 2011 at 6:23am
Completely unrelated, but LSI has a president with a really cool surname. :p
