SAN JOSE, Calif. - SanDisk Corp. has announced a definitive agreement to acquire Pliant Technology Inc., a developer of enterprise solid state drives (SSD), for approximately $327 million in cash and other incentives.
Pliant currently sells SSDs based on the SAS protocol for enterprise storage customers. The company’s product roadmap also includes PCIe-based solutions for high-performance compute servers.
The transaction, which has been approved by the boards of directors of both companies, is subject to customary closing conditions, including regulatory review and approval, and it is expected to close by the end of SanDisk’s second fiscal quarter.
SanDisk expects the transaction to be dilutive to its non-GAAP earnings by 2 percent to 3 percent in fiscal year 2011 and accretive to non-GAAP earnings in fiscal year 2012.
The move will expand SanDisk's SSD efforts. ''SanDisk has been fairly successful with their pSSD line but have yet to gain traction in client SSDs,'' said Gregory Wong, an analyst with Forward Insights.
''The Pliant acquisition is a departure from their consumer focus into the enterprise and data center environment. In addition to the enterprise SSD market opportunity - $5 billion in 2015 - the premise is that as NAND flash scales to smaller process nodes, advanced ECC, flash management, algorithms and in-depth knowledge of the inner workings of flash will provide a competitive advantage, particularly against independent, non-vertically integrated SSD companies,'' Wong said.
''The enterprise is the only place where SSDs are meeting with strong acceptance. Until today SanDisk was doing nothing to participate in this market,'' added Jim Handy, an analyst with Objective-Analysis. ''This is a really good move for SanDisk, and gives Pliant a lot of strength and backing that they can use as they establish themselves in the market.''
Pliant has secured several OEM partnerships, including Dell, LSI and Teradata. In 2009, Pliant announced that it had received $15 million in Series C funding. Investors included Menlo Ventures, Lightspeed Venture Partners, Arcturus Capital, and Divergent Ventures
Last year, Pliant announced the expansion of its Lightning product line with two new MLC (multi-level cell) NAND flash storage devices. In March, Milpitas, Calif.-based Pliant announced the retirement of chief executive officer Amyl Ahola, who remained on the company’s board. At the time, the company named Richard Wilmer as the new chief executive. Prior to Pliant, Wilmer served as COO and acting CFO for Santur Corp. and previously as its vice president of global operations.
Milpitas-based SanDisk recently announced results for the first fiscal quarter ending April 3, 2011. Total first quarter revenue of $1.29 billion increased 19 percent on a year-over-year basis and decreased 3 percent on a sequential basis. First quarter net income, in accordance with U.S. Generally Accepted Accounting Principles (GAAP), was $224 million, or $0.92 per diluted share, compared to net income of $235 million, or $0.99 per diluted share in the first quarter of fiscal 2010 and $485 million, or $2.01 per diluted share, in the fourth quarter of fiscal 2010.
SanDisk and Toshiba Corp. recently announced a 64-gigabit (Gb), 2-bits-per-cell (X2) based monolithic chip made on 19-nm technology, the most advanced NAND process technology node in the world.