Western DigitalCorp. (NASDAQ: WDC) and Virident Systems, Inc. announced today that they have entered into a definitive merger agreement under which Virident, a provider of server-side flash storage solutions, will be acquired by HGST, a wholly owned subsidiary of Western Digital. Virident will be acquired for approximately $685 million in cash. This represents approximately $645 million in enterprise value, net of Virident's estimated cash balance at closing.
Virident is a technology leader in one of the fastest growing segments in enterprise and cloud computing. Virident solutions enable enterprises to tackle performance-intensive datacenter applications with PCIe-based enterprise flash storage solutions for virtualization, database, cloud computing, and webscale applications. Virident's FlashMAX™ II can be installed in any server and provides the highest capacity in a single low-profile card, enabling organizations to maximize the use of valuable datacenter space, reduce datacenter sprawl and provide uncompromising performance. In addition, the company's FlashMAX Connect™ is the industry's first software suite to deliver a shared server-side flash storage tier with enterprise-class reliability.
The pending acquisition extends HGST's presence in enterprise SSDs, which IDC predicts will grow from $2.5B in revenue in 2012 to $7B in revenue by 20171. The acquisition further enhances the value of HGST solutions through Virident's intelligent storage software. The integration with HGST will enable Virident to accelerate its go-to-market efforts by leveraging HGST's strong brand, extensive channel relationships, and global customer reach.
Virident CEO Mike Gustafson will upon closing join HGST as a senior vice president leading the Virident team. Mr. Gustafson, who has more than 20 years of experience in the storage, server, networking systems and IT industries, will report to HGST President Mike Cordano.
"We have established a competitive position in the enterprise SSD space and with our recently announced acquisitions we are increasing our commitment to become an even more significant player in this high growth segment," said Steve Milligan, president and chief executive officer, Western Digital. "Virident has a proven leadership team and a culture of innovation. Its combination of great people, leading products and advanced technology will enhance our increasingly strategic position in enterprise storage."
"The Virident acquisition is a continuation of HGST's strategy to address customers' rapidly changing storage needs by delivering intelligent storage devices that tightly integrate hardware and software to maximize solution performance," said Cordano. "Virident's server-side flash storage helps datacenter customers solve their most significant data infrastructure challenges, including application performance across diverse workloads, power efficiency, and total cost of ownership. We welcome the Virident team to HGST and look forward to further accelerating their momentum."
"The Virident vision is centered on leading the flash platform transformation. This includes advancing adoption of server-side flash storage, software and solutions in next-generation datacenters. Bringing technology leadership and substantial business advantage to customers is our mission and drives our team every day," said Gustafson. "I want to recognize and thank our employees and founders for the combination of vision and execution. We are excited to join HGST and accelerate the growth of our business, partnerships and value."
RBC Capital Markets has acted as the financial advisor to Western Digital and BofA Merrill Lynch acted as financial advisor to Virident in connection with this transaction.
Closing of the acquisition, which is subject to customary conditions, is expected to occur in the fourth calendar quarter of 2013.