Seagate Acquires LSI's Flash Division for $450 Million
Disk-drive maker Seagate Technology added to its stake in the solid-state storage business when it revealed May 29 that it will acquire LSI's Accelerated Solutions and Flash Components divisions from Avago for $450 million in cash.
The acquisition bolsters Cupertino, Calif.-based Seagate's strategy to provide a full suite of storage solutions that includes enterprise PCIe flash and solid-state drive (SSD) controllers for the growing flash storage market.
Seagate competes with WD, Samsung and several others in the NAND flash drive market.
LSI's Accelerated Solutions business, No. 2 in market share in the PCIe flash sector, offers an enterprise-grade PCIe flash package focused on the high-growth cloud and hyperscale markets. LSI's flash business, led by its SandForce SF2000 and SF3700 controller products, is addressing volume markets, Seagate said.
Seagate said it expects the combination of its enterprise SSD product line and these SSD controller families to generate revenues of at least $150 million in FY 2015 and be slightly accretive to the company's gross margin with operating margin headwind of $30 million to $40 million.
The transaction is expected to close in the third quarter of calendar year 2014, subject to the satisfaction of customary closing conditions and the receipt of certain regulatory approvals, including those required by the Hart-Scott-Rodino Antitrust Improvements Act.