Data storage company Seagate Technology LLC is set to pay $450 million for two storage related divisions that came to Avago Technologies Ltd. with its acquisition of LSI Corp. Avago closed the purchase of LSI in an all-cash deal valued at $6.6 billion on May 6 after announcing its intentions in November 2013. (see Avago to Acquire LSI Via Debt-backed Deal).
Now Avago is selling on the Accelerated Solutions Division (ASD) and Flash Components Division (FCD), providing Seagate with PCIe flash-based solid-state drives (SSDs) and SSD controller IC capabilities, respectively. LSI's FCD business was based on its acquisition of SandForce Inc. for about $370 million in 2011 and includes the SandForce SF2000 and SF3700 controller products. The ASD business is the second largest player in the PCIe flash SSD space and offers a enterprise-grade PCIe flash SSDs, Seagate said.
The move by Seagate is by way of catch up as rival Western Digital made numerous SSD-related acquisitions in 2013, spending $685 million to acquire Virident and fold it into its HGST division, previously known as Hitachi Global Storage Technologies. Western Digital also invested $51 million in SSD vendor Skyera and in July 2013 acquired SSD maker STEC for $350 million.
"Seagate is committed to providing our customers with a complete range of storage solutions, and this acquisition will significantly enhance our flash storage offerings to supplement our existing portfolio," said Steve Luczo, Seagate chairman and CEO, in a statement. "This acquisition immediately boosts Seagate’s range and depth of flash storage capabilities today, and these teams bring to Seagate the expertise to accelerate our roadmap in this important and growing market," he added.
Seagate said the deal was expected to add about $150 million in annual sales to its 2015 financial year. The transaction is expected to close in the third quarter of calendar year 2014.
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