SanDisk Acquires Competitor Msystems For $1.3 Billion - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
News

SanDisk Acquires Competitor Msystems For $1.3 Billion

SanDisk, a leader in flash memory subsystems for imaging and audio storage, is acquiring one of its largest solid-state memory competitors, Msystems of Israel, in a stock transaction worth approximately $1.35 billion.

COLORADO SPRINGS, Colo. — SanDisk Corp., a leader in flash memory subsystems for imaging and audio storage, is acquiring one of its largest solid-state memory competitors, Msystems Ltd. of Israel, in a stock transaction worth approximately $1.35 billion.

Both companies have concentrated on NAND flash storage, although Mystems (Kfar Saba) has maintained a focus on USB memory sticks and cellular-phone handset solutions.

With the acquisition, SanDisk (Milpitas, Calif.) also gains a quick entry into the emerging 4-bit-per-cell NAND flash technology market. Msystems' recently-introduced x4 product is a technology designed to enable the utilization of 4-bit/cell NAND flash, which was "previously considered to be a practical and physical impossibility," according to the company.

This deal also represents the latest blockbuster in the flash-memory product arena. The combined companies will compete against Micron Technology Inc. (Boise, Ida.), which recently stunned the market by acquiring flash-memory product rival Lexar Media Inc. for $800 million.

Meanwhile, Msystems carriers some baggage, analysts said. Just last week, Israel-based personal storage company Msystems said it would not comment on recent rumors the company is for sale amid a stock investigation and potential patent problems. The company earlier confirmed there were a "variety of deficiencies and irregularities" in its stock-option practices

In a recent report, analyst Satya Chillara of American Technology Research Inc. (Greenwich, Conn.) said msystems "has recently launched its X4 technology. After reviewing the details, we believe [msystems] will have to address the legal issues surrounding Sandisk's IP."

In a statement, SanDisk chairman Eli Harari said that the acquisition would accelerate its pace of innovation — specifically, bringing SanDisk closer to handset manufacturers and mobile operators.

"Msystems is a leader in flash memory systems addressing mobile, portable and embedded markets and they have a strong team, significant IP and important OEM customers," he said. "In the near term, this transaction better positions SanDisk to serve the expanding storage needs of handset manufacturers and mobile network operators. In the long term, the combination with Msystems will be a catalyst in the development of next generation flash enabled consumer applications."

Msystems must seek Israel court approval, and the agreement also must pass regulatory approval in both the U.S. and Israel. SanDisk expects the deal to close in the fourth calendar quarter, after which Msystems will be wholly-owned subsidiary of SanDisk.

Terms of the deal call for each share of Msystems common stock to be converted into 0.76368 shares of SanDisk stock, representing a 26 percent premium over the average Msystems stock price of the last 30 trading days.

Last year, SanDisk entered the emerging three-dimensional chip space by acquiring Matrix Semiconductor Inc. for $238 million. And recently, more rumors are floating around about Toshiba Corp.'s new NAND flash-memory plant, a 300-mm mega fab that is called Fab 5. Toshiba's fab partner is SanDisk.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
State of the Cloud
State of the Cloud
Cloud has drastically changed how IT organizations consume and deploy services in the digital age. This research report will delve into public, private and hybrid cloud adoption trends, with a special focus on infrastructure as a service and its role in the enterprise. Find out the challenges organizations are experiencing, and the technologies and strategies they are using to manage and mitigate those challenges today.
Slideshows
Strategies You Need to Make Digital Transformation Work
Joao-Pierre S. Ruth, Senior Writer,  11/25/2019
Commentary
Enterprise Guide to Data Privacy
Cathleen Gagne, Managing Editor, InformationWeek,  11/22/2019
News
Watch Out: 7 Digital Disruptions for IT Leaders
Jessica Davis, Senior Editor, Enterprise Apps,  11/18/2019
Register for InformationWeek Newsletters
Video
Current Issue
Getting Started With Emerging Technologies
Looking to help your enterprise IT team ease the stress of putting new/emerging technologies such as AI, machine learning and IoT to work for their organizations? There are a few ways to get off on the right foot. In this report we share some expert advice on how to approach some of these seemingly daunting tech challenges.
White Papers
Slideshows
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Sponsored Video
Flash Poll