Fusion-io soars on SanDisk buyout

Shares of the flash memory storage company jump more than 22% on the takeover news.

By TheStreet.com Staff Jun 16, 2014 12:07PM

A Fusion-io Inc. banner hangs on the front of the New York Stock Exchange in New York © Peter Foley/Bloomberg via Getty ImagesBy Chris Ciaccia, TheStreet

Shares of flash memory storage company Fusion-IO (FIO) surged after the company agreed to be acquired by memory giant SanDisk (SNDK) for $1.1 billion in cash.

"Fusion-io will accelerate our efforts to enable the flash-transformed data center, helping companies better manage increasingly heavy data workloads at a lower total cost of ownership," said Sanjay Mehrotra, SanDisk president and CEO in the press release. "Customers will benefit from the addition of Fusion-io's leading PCIe solutions to SanDisk's vertically integrated business model. We look forward to working with the world-class engineering and go-to-market teams from Fusion-io to provide high-value solutions to customers around the world."

TheStreet.com logo"This transaction represents a compelling opportunity for Fusion-io's employees, customers and shareholders," said Shane Robison, chairman and CEO of Fusion-io. "Fusion-io's innovative hardware and software solutions will be augmented by SanDisk's worldwide scale and vertical integration, enabling a combined company that can offer an even more compelling value proposition for customers and partners."

SanDisk will start a tender offer for all outstanding shares of Salt Lake City-based Fusion-io for $11.25 a share in cash, with SanDisk funding the acquisition with cash available on its balance sheet. The transaction has been approved by the boards of both companies. It's expected that the transaction will close in the third quarter of SanDisk's fiscal 2014, and will start to be accretive on a non-GAAP basis to SanDisk in the second half of fiscal 2015.

Shares of Fusion-io were up 22.8 percent to $11.40, firmly above the offer price, indicating traders may be betting on a bid from another memory storage company.

Last week, "TheStreet" interviewed Fusion-io President and Chief Operating Lance Smith about the continued merger speculation surrounding the company.

"That chatter is certainly not new, and is driven because of the consolidation in the market and we are the leading provider of integrated flash-based application acceleration, and we are seeing a lot of the market validate our strategy and view of the opportunity," Smith said at the time.

More from TheStreet

Jun 16, 2014 10:25PM

If you had the chance to just stay home and still earn money, would you do it? Interested? Google onlineautoincome now!

Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
100 character limit
Are you sure you want to delete this comment?


Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.


StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

120 rated 1
268 rated 2
439 rated 3
709 rated 4
641 rated 5
609 rated 6
640 rated 7
516 rated 8
272 rated 9
152 rated 10

Top Picks

TAT&T Inc9



Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.