SanDisk Acquires Israels M-Systems

By Chris Preimesberger  |  Posted 2006-07-31 Print this article Print

Updated: The international transaction will enable SanDisk to proceed with plans to develop next-generation flash-enabled consumer apps.

SanDisk, which makes flash memory data storage cards for digital cameras and other handheld devices, announced July 30 that it is acquiring Israeli data storage company M-Systems for $1.55 billion in an all-stock transaction. M-Systems will become a wholly owned subsidiary of SanDisk, which said it will now be able to develop next-generation flash-enabled consumer applications for handsets, a SanDisk spokesman said. In the transaction, each M-Systems ordinary share will be converted into 0.76368 of a share of SanDisk common stock, representing a 26 percent premium over the average closing price of M-Systems shares for the last 30 trading days.
Eli Harari, chairman and CEO of SanDisk, confirmed the final purchase price at approximately $1.55 billion to eWEEK July 31. Earlier information on July 30 from the two companies had indicated the price was to be $1.35 billion.
The closing of the transaction is subject to several conditions, including Israeli court approval, regulatory approval and M-Systems shareholder approval. The transaction is expected to close in the fourth quarter. This combined company joins together two flash memory pioneers with complementary products, customers and channels, the spokesman said. Flash memory is a form of non-volatile memory that can be electrically erased and reprogrammed. "In the near term, this transaction better positions SanDisk to serve the expanding storage needs of handset manufacturers and mobile network operators," Harari said. "In the long term, the combination with M-Systems will be a catalyst in the development of next-generation flash-enabled consumer applications." SanDisk teams up with Philips to secure contactless payments. Click here to read more. The acquisition will give SanDisk the critical mass and complementary products, customers, channels, technology and manufacturing base to take the company to the next level, Harari said. "The NAND flash data storage business is in its early stages, and we believe the market opportunity is largely untapped," Harari said. NAND flash uses tunnel injection for writing and tunnel release for erasing. NAND flash memory forms the core of the removable USB interface storage devices known as USB flash drives. Milpitas, Calif.-based SanDisk claims to be worlds largest supplier of flash memory data storage card products. It also designs, manufactures and markets industry-standard solid-state data, digital imaging and audio storage products using its patented high-density flash memory and controller technology. M-Systems, based in Kfar Saba, Israel, transforms raw flash into smarter storage solutions. The company produces embedded flash drives deployed in millions of mobile handsets and U3 USB smart drives designed for leading global brands. This deal will enable M-Systems to continue supporting its OEM customers, said Dov Moran, M-Systems president and CEO, as well as "strengthen our innovation and product offering with SanDisks leading edge, low-cost fab capacity. This deal has synergy at its core, encompassing people, technology, products and customers." Check out eWEEK.coms for the latest news, reviews and analysis on enterprise and small business storage hardware and software.
Chris Preimesberger Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz

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