Toshiba Rescues OCZ From Bankruptcy With $35M Buyout
Financially troubled solid-state storage maker OCZ Technology confirmed Dec. 2 that it is selling its assets to Toshiba for $35 million after announcing last week that it would file for bankruptcy.
Toshiba, the original developer of NAND and NOR flash back in the late 1980s, said it will be incorporating OCZ's client base and enterprise solid-state drive business into its own, and that the sale is expected to close in January.
OCZ's stock was selling for 16 cents on Dec. 3. The San Jose, Calif.-based company had received $13.1 million in debt funding three months ago.
Its main products are its 2.5-inch Agility flash drives and the VeloDrive PCI-Express Solid-State Drive. Previously, OCZ flash drives for desktop and laptops, power supplies, cooling products, and peripherals.
Eleven-year-old OCZ had taken a total of $47 million in venture funding over the years and been losing more than $100 million a year for the past couple of years. It had only about $70 million in total assets left, storage analyst Howard Marks wrote in his blog.
As part of the deal, Toshiba said it will provide OCZ with the funding it needs to pay debts, buy additional NAND flash media and support existing customers during the transition. Toshiba did not say whether it will continue OCZ's service-level agreements with customers after the close of the deal.
Toshiba said it will retain most, if not all, of the OCZ employee base and take over all of its established brand and sales channels.
OCZ Chief Executive Ralph Schmidt said in a statement released by Toshiba that credit issues and problems with the supply of NAND flash were the causes for the company's financial downturn. He didn't mention the increasingly competitive solid-state drive market that includes huge international competitors such as No. 1 flash producer Samsung, WD, Seagate, SanDisk, Intel and several others.