Toshiba Plans $35M Acquisition Of Ailing SSD Pioneer OCZ


OCZ, a pioneering SSD maker that has fallen on hard times over the past couple of years, has signed a deal to be acquired by Toshiba.

OCZ, which last week said it would likely liquidate if it weren't acquired by Toshiba, signed a deal under which the Japanese electronics giant will acquire "substantially all of OCZ's assets in a Chapter 11 bankruptcy proceeding" for $35 million, OCZ said in a statement.

The acquisition is not a done deal, as another company could make an acquisition bid for OCZ. The deal also is subject to bankruptcy court approval.

 

[Related: SSD Pioneer OCZ Says It Will Either Be Acquired By Toshiba Or Liquidate]

OCZ has been hurting financially for some time. Last October, OCZ appointed Ralph Schmitt as CEO and issued a revenue warning.

While OCZ used its previous memory experience to become one of the earliest stand-alone SSD manufacturers, the company has been working in an industry consolidating into a limited number of vendors with their own storage controller and NAND memory manufacturing capability. OCZ has depended on Toshiba as its primary NAND supplier, according to Jim Handy, an analyst with Object Analysis.

Handy last week wrote in a research newsletter that an acquisition would be good for both companies and turn Toshiba into a major SSD competitor.

"Toshiba has not had as strong of a presence in the SSD market as the company would like, and OCZ would give it strong technology and a respected name in the retail market. Meanwhile, Toshiba would give OCZ something that the fledgling firm has so far been unable to attain: a steady source of NAND supply at competitive prices. OCZ has had a difficult history of having to pay price premiums during NAND shortages owing to the company's consistently poor credit ratings," Handy wrote.

Jon Bach, president of Puget Systems, an Auburn, Wash.-based system builder, said the primary concern he has seen among PC buyers is not what happens to OCZ's SSD or memory business, but what happens to its power supply business.

OCZ in 2007 acquired PC Power and Cooling, a power supply vendor revered by the enthusiast PC market as a top vendor, Bach said. "They make really big fans with lots of cooling power," he said. "However, our focus is on building quiet PCs."

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