LSI To Purchase AMCC 3ware RAID Business
For $20 million in cash.
This is a Press Release edited by StorageNewsletter.com on April 7, 2009 at 3:57 pmTHE PRESS RELEASE OF LSI
LSI Corporation has signed a definitive agreement to acquire the assets and certain associated intellectual property of the 3ware RAID adapter business of Applied Micro Circuits Corporation for approximately $20 million in cash.
3ware products include SAS and SATA RAID adapters designed to offer cost-effective, high-performance, high-capacity storage solutions for a broad range of applications. 3ware adapters are sold to end users through a worldwide network of channel partners including leading storage distributors and system builders.
"The indirect channel plays an important role in delivering today’s increasingly capable, yet often complex storage solutions to customers of all sizes," said Abhi Talwalkar, LSI president and chief executive officer. "The addition of the 3ware business to the LSI storage portfolio uniquely positions us to provide an unmatched breadth of rich storage solutions coupled with the outstanding channel support needed to help channel partners maximize their effectiveness."
The transaction is expected to close within thirty days and is subject to satisfaction of customary closing conditions. Upon closing, the 3ware business will be integrated into the LSI Engenio Storage Group.
LSI expects the acquisition to be neutral to non-GAAP earnings per share in 2009. The company expects to provide further details in April when it reports first quarter results.
THE PRESS RELEASE OF AMCC
Applied Micro Circuits Corporation announced the sale of its 3ware storage adapter solutions business to LSI Corporation for approximately $20 million in cash. Applied Micro is a recognized leader in providing sustainable computing and high speed connectivity solutions to process, transport, and store information in the next generation data center and carrier central office based on IP & Ethernet. This transaction allows Applied Micro to focus on its core strengths in the development of highly integrated deep sub-micron Integrated Circuits for energy optimized packet based networks. The transaction is expected to close in 3-4 weeks.
“AMCC has tremendous growth opportunities in the ongoing transformation of the data center and carrier central office into a high speed energy optimized distributed computing complex. Our leadership processor technology is used in building wireless and wireline communications networks, image processing, and storage systems. Our leadership 10GbEthernet connectivity technology is at the heart of building the next generation of high speed networks. This transaction will allow us to maximally sharpen our focus on the substantial opportunities in front of us in building Systems on a Chip (SOCs) for the world’s leading OEMs,” said Kambiz Hooshmand, AMCC’s President and Chief Executive Officer.
Oppenheimer & Co. Inc. acted as financial advisor to AMCC on this transaction.
Comments
AMCC tries to enter into the storage industry but it was finally a disaster.
In August 2003, it acquires JNI, in FC and IB HBAs, for no less than $190 million in cash and then stopped this activity. In March 2004, the company paid $150 million, once more in cash, to get other start-up 3ware, in storage processor, PCIe SAS and SATA (switched) RAID controller as well as in disk array subsystems. One month later, it purchased chip level software from IBM to enable RAID controllers, SAN switches and HBAs based on IBM's PowerPC 400 series, this time for $227 million, in cash as usual. Total: more than half billion dollar spent for an activity finally sold to LSI for a mere $20 million!
3ware, the AMCC’ storage division, had good technologies, but the sales were really poor. For its 3Q09 fiscal quarter ending in December 2008, storage revenues represent only $9.8 million or 17% of the total sales of the company.
The competition in RAID is ferocious, from U.S. firms like Adaptec, ATTO and LSI, Xyratex in UK, but also from a lot of ambitious Taiwanese companies (Accusys, Areca, Infortrend, Promise, Proware).
Last February, AMCC layoffs around 100 people.
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