LSI Acquires SandForce, SSD Shifts into Higher Gear
10/26/2011 by: Theo Valich
The explosion on the storage market isn't showing any signs of slowing down. Currently, SSD drives are at rage and large players are eating smaller players. One of key players in the Solid State Drive market is SandForce, the company which became the prevalent controller manufacturer for majority of SSDs on the market.
However, SandForce was Venture Capital-backed operation and after all the shuffling and checking during the proposed Seagate acquisition, the investors had prepared the company for sale. Following the market closure, LSI Corporation announced financial results for the third quarter 2011, while the separate announcement was made that LSI is the one that will acquire SandForce.
The announcement wasn't surprising, since LSI was one of investors in the company. In a 322 million dollar transaction, LSI is acquiring SandForce in its entirety (100% buyout), alongside with 48 million dollars of unvested stock options and restricted shares. This transaction is making other investors (DCM, Storm Ventures, TransLink Capital, UMC Capital, Red Maple Ventures, Darwin Ventures, Canaan Partners) very happy indeed.
Even though it is too early to draw conclusions, the fact is that the SSD controller maker is now becoming a part of a larger entity that prove its worth by previous acquisitions (3ware, Agere Systems). This is seconded by the fact that SandForce will continue to offer their products. As we all know, following OCZ's acquisition of Indilinx, that controller manufacturer all but disappeared from the market, focusing on next gen controllers.
In case of SandForce, there is a very strong ecosystem around the company and now SandForce has all the resources they need to make this merger a success. Given LSI's expertise in multiple drive arrays, we wonder does this acquisition mean we'll soon have TRIM capability on a RAID configuration... in any case, this announcement has more positives than negatives. Let us know if you find one (downside).
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