Western Digital Acquires Stec to Solidify Enterprise SSD Business

Paul Lilly

Savvy move by Western Digital is low risk, high reward

There will always be those who doubt or remain skeptical of the long-term reliability of solid state drives (SSDs), but at this stage of the game, they're generally viewed as a viable storage medium, even among enterprise clients. Hence Western Digital felt compelled to spend approximately $340 million in cash ($6.85 per share) acquiring Stec, a Santa Ana firm that specialize in flash memory-based solutions and the first vendor to develop SSDs for large-scale enterprise storage.

Western Digital intends to use the acquisition to augment its own joint enterprise SSD operations with Intel, not supplant it, as the drive maker said it remains committed to delivering current and future SAS-based SSD products. And for Stec, the decision to sell likely came easy, as it now gains access to Western Digital's resources.

"At this key point in the evolution of the storage industry, Stec is excited to consummate this transaction. It will be an important next step in proliferating many of the innovative products and technologies that Stec has been known for throughout its 23-year history and provides immediate value for our shareholders and a strong future for our employees and customers," said Mark Moshayedi , president and chief executive officer, Stec. "This merger will enable our world-class engineering team and IP to continue to make a significant contribution to the high-performance enterprise SSD space that has long been Stec’s focus."

Stec's board of directors unanimously voted to approve the deal, which is expected to close in the third or fourth calendar quarter of 2013.

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