Mergers and acquisitions news: Is Fusion-io the next to be acquired?
This blog recently highlighted Cisco Systems making the technology acquisition of Whiptail, a producer of solid-state virtual-memory systems. Reports are swirling that a similar deal could soon be made, as Fusion-io, also a maker of flash-type technology, is becoming highly sought-after.
With Western Digital recently buying Virident Systems, Bloomberg explained in a recent article that Seagate is a frontrunner to buy Fusion-io. Company shares rose 26 percent this week after Western Digital announced the Virident acquisition. Facebook and Apple are two of Fusion-io's top customers, and the news source said that this would give Seagate a stronger position in the flash memory department.
Shebly Seyrafi, a New York-based analyst at FBN Securities, told Bloomberg that another reason Seagate could look toward Fusion-io is that the firm had originally been in talks to acquire Virident. With competitor Western Digital moving first, Seagate needs to find ways to keep pace.
"Western Digital, we believe, aggressively came in and scooped up Virident, which Seagate could have looked to acquire," Seyrafi said. "Western Digital is pulling ahead of Seagate, and the clearest way for Seagate to respond and catch up is through an acquisition of Fusion-io."
The Motley Fool agrees that Seagate is a likely candidate, as the company's hard drive revenues are under threats from systems like Fusion-io. To that same extent, a technology acquisition will likely benefit Fusion-io, as multiple potential buyers will further ensure that a strong exit strategy can be created.
The business world is competitive, but that is further reason why M&A activity can benefit all parties involved. Customer bases can be increased and businesses can further expand. When two companies have complementary ideals and are willing to work with one another, it is possible to find level ground.