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SanDisk Picks up Fusion-io for $1.1B

Stocks in this article: SNDK FIO

NEW YORK (The Deal) -- SanDisk (SNDK - Get Report) said Monday it has a deal in place to acquire Fusion-io (FIO) for $1.1 billion, adding a suite of hardware and software products to its flash memory and storage operation.

Salt Lake City-based Fusion-io is a developer of flash-based products that help boost application performance at datacenters, helping corporate customers run systems faster. The company, which boasts Apple (AAPL) co-founder Steve Wozniak as chief scientist, has well-regarded technology but has struggled as a business, reporting losses in each of the past five quarters.

Terms of the deal call for SanDisk to pay $11.25 per share in cash for Fusion-io, a premium of 21% to the target's Friday close. SanDisk said it would fund the purchase from cash available on its balance sheet.

Milpitas, Calif.-based SanDisk makes memory chips used in computers, smartphones, cameras and music players. The company has been attempting to add to its higher-end technical offerings, which promise higher margins and less vulnerability to commodity price swings.

Company CEO Sanjay Mehrotra in a statement said that the purchase "will accelerate our efforts to enable the flash-transformed data center, helping companies better manage increasingly heavy data workloads at a lower total cost of ownership."

The deal should also help SanDisk boost sales to large corporate accounts.

"Customers will benefit from the addition of Fusion-io's leading PCIe solutions to SanDisk's vertically integrated business model," Mehrotra said. "We look forward to working with the world-class engineering and go-to-market teams from Fusion-io to provide high-value solutions to customers around the world."

Fusion-io chairman and CEO Shane Robison called the deal "a compelling opportunity for Fusion-io's employees, customers and shareholders," saying his company would benefit from being part of SanDisk's global operations.

Goldman, Sachs & Co. acted as financial adviser to SanDisk, with Skadden, Arps, Slate, Meagher & Flom LLP's Amr Razzak, Kenton King, Sonia Nijjar, Marat Massen, Christopher Yap, Karen Corman, Christy Peetz, Joseph Yaffe, Kristin Davis, Laura McIntyre, Eric Sensenbrenner, Nathan Giesselman, David Hansen, Stuart Levi, Carrie LeRoy, Andrew Woodard, Ken Kumayama, Greg Norman, Sharis Pozen, Steven Sunshine, Ingrid Vandenborre, Joanna Warren and Alison Bloch serving as legal counsel.

Fusion-io was advised by Qatalyst Partners and Wilson Sonsini Goodrich & Rosati.

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