In a surprising move, Seagate today issued a press release announcing the company has acquired LSI's Accelerated Solutions Division and Flash Components Division from Avago for $450 million in cash. The Accelerated Solutions Division is mainly LSI's Nytro controllers and the Flash Components Business covers pretty much the SandForce controllers.
SandForce was founded in 2006 and first changed ownership in 2012 when LSI purchased the company for $370 million. LSI in turn was recently acquired by Avago and now their flash business will become part of Seagate. SandForce SSD controllers can be found in SSDs of Adata, Corsair, Kingston, OWC, Mushkin, Transcend and many more.
In fiscal 2015, Seagate expects the combination of its enterprise SSD product line and these SSD Controller families to generate revenues of at least $150 million and be slightly accretive to the company gross margin with operating margin headwind of $30 to $40 million.
As Seagate drives operational synergies and leverages its SSD technology into its product portfolio, the company would expect the operating margin contribution from its SSD business to be neutral to positive in fiscal 2016 and beyond.
The transaction is expected to close in the third quarter of calendar year 2014.
