June 17, 2014

SanDisk will acquire Fusion-io in $1.1 billion deal

It was reported recently that SanDisk, a flash storage solutions provider, will acquire Fusion-io for $1.1 billion, according to a press release

According to a Reuters article, SanDisk has been working on selling solid-state drives to companies. SanDisk manufactures flash memory chips. The chips are commonly used to store data in electronic devices like cameras and smart phones, and now the company is using them to create drives that are more profitable. 

This explains SanDisk's acquisition strategy in purchasing Fusion-io. Fusion-io is a maker of memory chips and software that make it possible for server computers to access data more quickly. 

This will allow SanDisk to expand into the market of creating data centers where it may be able to generate higher profits, according to Bloomberg Businessweek

"Fusion-io will accelerate our efforts to enable the flash-transformed data center, helping companies better manage increasingly heavy data workloads at a lower total cost of ownership," Sanjay Mehrotra, SanDisk president and CEO said in a press release. "Customers will benefit from the addition of Fusion-io's leading PCIe solutions to SanDisk's vertically integrated business model."

As we have discussed previously, acquisition deals often present an opportunity for companies to gain technology that will complement their existing offerings and give them an edge in the market.

This deal is beneficial to SanDisk because it will help give the company the technology it needs to create the product it wants to sell, and increase revenue as well as its portfolio. By joining their technologies together, these companies will be able to reach a larger goal of offering a more valuable product. 

Companies interested in developing an acquisition strategy can consult an M&A advisor to learn more about business mergers and acquisitions, and their options.