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(Steve Griffin | The Salt Lake Tribune) Fusion-io is a surging technology company, a leader in providing solid-state (chip-based) memory for servers in huge data centers. Here co-founders Rick White and David Flynn are photographed in front of the binary code that spells out Fushion-io in the company's Cottonwood Heights, Utah Monday, March 5, 2012. The co-founders are no longer with the company, which is being acquired by SanDisk for $1.1B.
SanDisk to acquire Utah-based Fusion-io for $1.1B
Technology » Cottonwood Heights company makes flash-based computer storage.
First Published Jun 16 2014 10:21 am • Last Updated Jun 17 2014 11:38 am

SanDisk Corp.’s $1.1 billion acquisition of Fusion-io should expand the marketplace for the Utah-based maker of data center computer storage products, SanDisk executives said Monday.

"We look forward to engaging in the Salt Lake City area with the Fusion-io teams in terms of growing SanDisk’s business," said President and CEO Sanjay Mehrotra after his Milpitas, California, company announced the cash purchase of Cottonwood Heights-based Fusion-io.

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Mehrotra said Fusion-io’s operations would remain in Utah.

Founded in 2005, Fusion-io has about 300 employees in the state, 938 globally. It reported revenues of $432 million in the fiscal year that ended June 30, 2013.

The maker of flash storage products — from thumb drives to data center technology — said it will make a tender offer for all outstanding shares of publicly traded Fusion-io for $11.25 a share.

Fusion-io’s shares closed Monday at $11.36 a share, up 2.08 points, or 22.4 percent, after the sale was announced.

Approved by directors of both companies, the deal is subject to approval by regulators. It is expected to close in the third quarter.

Fusion-io CEO Shane Robison called the sale a "compelling opportunity" for the company, its customers and shareholders.

"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," Robison said.

Three of Fusion-io’s biggest customers are Facebook, Apple and Hewlett-Packard. But company shares have been on a downward trajectory, even as revenues grew from $192 million in fiscal 2011 to $359.3 million in 2012 and then $432.4 million last year.


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Since 2009, it has suffered net losses every year except 2011. In its 2013 fiscal year, the company had a net loss of $38.2 million, according to regulatory filings.

Fusion-io’s shares traded at a height of $39.60 in November of 2011, about five months after going public. They have declined steadily ever since.

In May of 2013, cofounder David Flynn resigned and was replaced as CEO by Robison, a former HP executive. The other cofounder, Rick White, resigned as chief marketing officer.

SanDisk reported $6.1 billion in revenue last year, with $1 billion in net income. It had 5,459 full-time employees at the end of last year.

On Monday, SanDisk executives praised their company’s vertical integration as part of the reason they expect Fusion-io to expand in its market after SanDisk completes the purchase. That integration includes getting into flash chip manufacturing. Fusion-io traditionally bought many of its chips from IM Flash Technologies of Lehi.

"We will continue to work with the suppliers of flash to Fusion-io," said Sumit Sadana, SunDisk executive vice president and chief strategy officer, "while transitioning parts of Fusion-io’s business to the SanDisk memory."

By using Fusion-io products, large data centers can greatly accelerate their computing operations. Flash memory can be many times faster than the spinning disks that have been the mainstay of data storage for years.

tharvey@sltrib.com



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