LSI to be sold in $6.6-billion deal


— 5:02 PM on December 16, 2013

My, my, how quickly things change. Just over two years ago, SandForce was snatched up by LSI for $322 million. SandForce went on to become LSI's Flash Components Division. Now, it's LSI's turn to be acquired—this time for the much tidier sum of $6.6 billion.

The buyer is Avago, a firm described in the sale announcement as a "leading designer, developer and global supplier of a broad range of analog semiconductor devices." Here's the upshot of the deal, according to the two companies:

The acquisition creates a highly diversified semiconductor market leader with approximately $5 billion in annual revenues by adding enterprise storage to Avago’s existing wired infrastructure, wireless and industrial businesses. The combined company will be strongly positioned to capitalize on the growing opportunities created by the rapid increases in data center IP and mobile data traffic.

The Wall Street Journal's coverage of the buyout has a more concise summary. "In a conference call," the paper writes, "Avago CEO Hock Tan said that buying LSI will help his company expand in storage hardware and other products sold in data centers."

Data center storage seems to be the name of the game, in other words. There's no mention of consumer storage products in either the WSJ story or the official press release. That said, considering the popularity of SandForce controllers in consumer SSDs today, I'd say Avago stands to make a lot of money from maintaining LSI's current course in the consumer market.

Avago's acquisition of LSI has already been approved by the boards of both firms. The deal is still subject to a vote by LSI stockholders and to regulatory approval by the appropriate regulatory authorities.

   
Register
Tip: You can use the A/Z keys to walk threads.
View options

This discussion is now closed.