Breaking: OCZ Technology to Acquire Indilinx Co., Ltd
While OCZ will likely continue to ship SandForce-based SSDs for some time, ultimately use of their own proprietary controller technology will be the goal moving forward. Think ink is still drying on the deal that is expected to close within the next 30 days or so. Full press release details are listed below...
Addition of High Performance Controller Technology and Firmware is Expected to Accelerate Storage Technology Innovation and Expand Product Portfolio
SAN JOSE, CA—March 14, 2011—OCZ Technology Group, Inc. (Nasdaq:OCZ),a leading provider of high-performance solid-state drives (SSDs) for computing devices and systems, today announced it has signed a definitive agreement to acquire Indilinx Co., Ltd, a privately held fabless provider of flash controller silicon and software for SSDs.
OCZ will gain substantial intellectual property from Indilinx including approximately 20 patents and patent applications related exclusively to the business as part of the transaction. For example, the acquisition is expected to extend OCZ's capabilities with advanced controller technology including Tinkerbell™, a high performance eMMC 4.4 x controller that replaces SSDs in consumer electronic devices such as smartphones, tablet PCs, GPS units, and netbooks. Tinkerbell improves the user experience in consumer mobile devices for applications such as internet browsing, gaming, social networking applications, emails, and multimedia play.
Following its acquisition by OCZ, Indilinx will continue to produce and supply its line of controller products to SSD manufacturers and OEMs on a global basis. The Indilinx controller business, and its 45 employees, will remain intact under the leadership of Bumsoo Kim, the founder and President of Indilinx, and Hyunmo Chung, Indilinx's Chief Technology Officer. OCZ will continue its own R&D program to develop new proprietary technologies and products to expand its own solid state drive offerings.
The Indilinx acquisition notwithstanding, OCZ plans to continue utilizing controllers from other manufacturers including long-term partner SandForce, who currently supplies SSD processors for a wide range of the Company's SSD products including the Vertex 2, Agility 2, RevoDrive, customizable Deneva enterprise drives, and the upcoming Vertex 3 family of SSDs.
"This transaction is an important step in OCZ's strategy and significantly enhances our ability to capitalize on the worldwide demand for Solid State Drives," said Ryan Petersen, CEO of OCZ Technology Group. "This combination brings together two organizations that are committed to advancing solid state drive design, and provides a unique opportunity for OCZ to increase both customer and shareholder value as well as expand our reach into embedded markets."
Under the terms of the agreement, OCZ will acquire Indilinx for approximately $32 million of OCZ common stock. Indilinx shareholders will own approximately 9.5% of the OCZ shares outstanding after issuance of the shares. The transaction has been approved by the board of directors of each company, and is expected to close within 30 days, subject to customary closing conditions, including regulatory approvals. OCZ expects the transaction to become accretive to its earnings per share toward the end of this fiscal year on a non-GAAP basis, excluding acquisition-related expenses, restructuring charges, and amortization of intangibles.
Ryan Petersen, CEO, will be a featured speaker at the Roth Capital 23rd Annual Orange County Growth Stock Conference today at 5:30 pm pacific time. To listen to the presentation and view the accompanying slides, please visit the investor relations events section of OCZ website at www.ocztechnology.com and click on the link provided for the web cast.
Merriman Capital, Inc., a wholly-owned subsidiary of Merriman Holdings, Inc. (Nasdaq:MERR), served as OCZ's exclusive financial advisor for the transaction.