SanDisk To Buy Fusion-io For $1.1 Billion, Down $370 Million From 2011 IPO Valuation
Samantha Sharf Forbes Staff
6/16/2014 @ 10:06AM
SanDisk SNDK +2.47% announced Monday it will acquire Fusion-io FIO +22.63% for $1.1 billion. The chipmaker will pay $11.25 per share in an all cash deal, a 21% premium over the smaller storage company’s closing price Friday.
Shares of Fusion-io were up close to 23% to $11.45 in early trading Monday. SanDisk shares were up about 3%, hitting a new 52-week high of $101.50.
Fusion-io has had a bumpy trading year. Even with Monday’s surge, shares remain well below the stock’s $15.59 52-week high. Around this time last year, FORBES’ Nathan Vardi wrote a post called “ Fusion-IO: The Other Hot Tech IPO That Went Badly.” Fusion-io, he noted,
has seen the venture capitalists cash out and stock investors get creamed. Fusion-IO, based in Salt Lake City, was a Silicon Valley darling, featuring Apple co-founder Steve Wozniak as its chief scientist and venture capital investor New Enterprise Associates.
Founded in 2006, Fusion-IO makes advanced data storage systems. It went public in 2011 at a sky high multiple of 41 times the previous year’s sales, valuing the company at $1.48 billion.” Market conditions are not looking up for the company, but SanDisk hopes bringing the company under its $23 billion market cap fold will pay-off.
“Fusion-io 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,” said SanDisk CEO Sanjay Mehrotra in a statement. Fusion-io CEO Shane Robinson added that SanDisk’s global scale will be helpful in distributing his company’s products, which are used in data centers.
The deal is expected to close in the third quarter of 2014 and to begin adding to SanDisk’s non-GAAP earnings in the second half of 2015.
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