SanDisk to buy Fusion-io -

SanDisk has announced that it will buy Fusion-io for about $1.1 billion to bolster its flash storage drives operations.

Fusion-io has not done well since its initial public offering in 2011, but SanDisk wants its technology for its own lineup of storage products rather than its business sense. SanDisk is using Fusion-io NAND memory chips to build and sell its own solid-state drives. The flash drives are more profitable than SanDisk's traditional business of selling memory chips for smartphones and cameras.

SanDisk was starting to position itself as an enterprise storage company and Fusion-io helps that happen quickly.

SanDisk Chief Executive Officer Sanjay Mehrotra said Fusion-io does not buy chips from SanDisk but it will after the deal is complete.

He added that vertical integration is really key to winning in the enterprise storage market. Which is fair enough we always found it difficult to do much when we were horizontal.

Flash drives are also being adopted by data centres, a market where SanDisk competes with rivals such as Western Digital.

SanDisk's offer of $11.25 per share is 21 percent of Fusion-io's shareprice but is 40 percent less than Fusion-io's IPO price of $19 in 2011.

Fusion-io's customers include Apple and employs Apple co-founder Steve Wozniak as chief scientist. It is SanDisk's fifth acquisition in enterprise storage, the most recent being its $307 million purchase of SMART Storage Systems last July.

Fusion-io helped pioneer high-end solid-state storage technology but struggled to find customers beyond a few large companies running big data centres.