Toshiba has agreed to acquire struggling San Jose, Calif.-based solid-state drive provider OCZ for $35 million as part of chapter 11 bankruptcy proceedings.
OCZ signaled a that a possible deal was in the works earlier this week while the company announced that it had begun moving forward with the bankruptcy process. Among Toshiba's demands was the "the preservation of the value of the business, including the retention of employees," said OCZ.
Now, it's official.
In a statement, OCZ revealed that the companies have come to an agreement that paves the way for Toshiba "to acquire substantially all of OCZ's assets in a chapter 11 bankruptcy proceeding for $35M," including OCZ's client and enterprise SSD business units. The deal, which is expected to close within 60 days, has been approved by OCZ's board of directors.
OCZ's enterprise SSD portfolio includes the MLC-based Talos 2 SAS line, based on MLC flash chips and Deneva 2 SSDs, which ship in MLC, eMLC and SLC varieties. On the server-side, application acceleration front, the company provides Z-Drive R4 and ZD-XL SQL Accelerator PCIe SSDs. Its consumer slate includes SSDs and power supplies.
OCZ vowed to "continue to operate and serve existing and future customers during this process" during the transition courtesy of Debtor-in-Possession financing provided by Toshiba. As indicated before, a bankruptcy court must sign off on the deal.
OCZ CEO Ralph Schmitt described the struggles his company faced in the increasingly competitive flash storage market. "NAND flash supply constraints," credit issues and growing pricing pressure all contributed to the company's "on-going operating losses," he said in company remarks.
"We have been working diligently on this partnership with Toshiba and we believe that this is the best outcome under our current corporate conditions," added Schmitt.
For Toshiba, acquiring OCZ is another step closer to becoming a major player in the enterprise data storage market. "If our bid is successful, the combination of our leading NAND technology with OCZ's SSD expertise will allow us to further strengthen Toshiba's SSD business," said Toshiba's Seiichi Mori, vice president of the company's solid-state storage division, in a statement.
Moiri said that his company is "confident that it will reinforce our capabilities and help us to secure leadership in the SSD market." The company's other efforts include a $3 million investment in Zadara, a virtual private cloud startup, and an IP-sharing partnership with Violin Memory, a provider of all-flash arrays for storage area networks.
Pedro Hernandez is a contributing editor at InfoStor. Follow him on Twitter @ecoINSITE.