Toshiba Acquires OCZ's Assets for $35 million
by Kristian Vättö on December 3, 2013 4:50 AM EST
Following last week's news of OCZ's bankruptcy filing, it's now official that Toshiba is acquiring OCZ's assets for $35 million cash. The agreement includes all of OCZ's client and consumer SSD business (controller IP, firmware, software and employees) and the acquisition is expected to be completed within the next 60 days. Unfortunately there is no official word on the fate of OCZ's other product groups (such as power supplies and cooling) but I've asked OCZ to clarify that and will update this post once I hear back.
The acquisition agreement includes a condition that Toshiba must provide OCZ with sufficient DIP (Debtor-in-Possession) financing in order for OCZ to keep the business going for the time being. In other words, OCZ's will continue to do business as normally but the press release doesn't reveal anything about what happens when the acquisition is completed. OCZ did tell us that warranties will be honored and their support status will remain unchanged but I'm waiting for OCZ to confirm that this also applies to the post-acquisition period (i.e. Toshiba would take responsibility of OCZ's warranties).
I'm glad that the deal went through because OCZ has a substantial amount of know-how when it comes to SSDs. OCZ had no troubles creating a high performance SSD, which speaks for talented engineering, but reliability was always their stumbling block. OCZ made the mistake rushing products to the market with only little validation but I'm confident that this will change under Toshiba's management. Validation is often the toughest part for smaller OEMs because it's an expensive and time consuming process -- there is simply not enough capital to validate the product for a full year like Intel has done in the past. With Toshiba the capital or manpower for a thorough validation process should no longer be an issue, especially because Toshiba has proven to be reliable in the past.
For someone like Toshiba, $35 million is a drop in the ocean. Compared to OCZ's current market cap ($7.68M), even $35 million is a good deal but bear in mind that back in 2011 OCZ paid $32 million for Indilinx alone. Now Toshiba is getting OCZ along with the former Indilinx and PLX for about the same price. It doesn't help that a little over year ago when OCZ acquisitions rumors were at their hottest, I heard figures of up to $1 billion being offered to OCZ but the company turned down the offers. It's easy to say now but OCZ should have struck while the iron was hot.
Either way, I'm eagerly waiting to see how the acquisition will play out. I doubt we will see the OCZ brand any longer, but it will be interesting to see OCZ's influence on Toshiba's future SSDs.
Source: OCZ Press Release
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DanNeely - Tuesday, December 3, 2013 - link
Depends on when the offer was made. OCZ went from under $100m for most of 2010 to a peak of $500M in 2011 and a second peak of $600M in early 2012 with a $400M average from mode 2011 to late 2012. Before their price began collapsing late in the year, even if the $1bn offer was serious it could've been argued that it wasn't enough of a premium for their likely growth over the next few years.djscrew - Wednesday, December 4, 2013 - link
Picture or it didn't happen.DanNeely - Wednesday, December 4, 2013 - link
https://ycharts.com/companies/OCZ/market_capRU482 - Tuesday, December 3, 2013 - link
I almost feel bad for the situation OCZ put themselves into, reading $1B vs $35M. Then again, I have a box with about 50 failed OCZ and other Indillinx SSDs sitting in my office, so I don't feel TOO bad for themSivar - Tuesday, December 3, 2013 - link
PNG for images like this! PNG!(or GIF, but definitely not JPG! They look horrible and image sizes are much larger)
MrSpadge - Tuesday, December 3, 2013 - link
And I thought those ligther pixels without the Toshiba name were features. Meant to make it look like some hand-drawing ;)Movieman420 - Tuesday, December 3, 2013 - link
Yer...that 1B vs 35M is some sick irony. I hope with Tosh's help that the Ocz name will climb back to the top with solid validated hardware. Maybe they'll restore PC P&C to it's former glory...I bought my 600W Silencer about 2 month b4 they were bought by Ocz. I've been a loyal Ocz customer for a few years now. Heh, most of what I've learned about SSD tech is from hanging out on their support forum...esp during the early days of 1st and 2nd gen drives (before sandforce). Also gotta say that I've never seen a support team quite as dedicated as the guys at Ocz. Extremely knowledgeable techs that weathered many a storm and adsorbed boat loads of flak created by new product launch disasters. I'm glad to hear these guys still have a job...one that should get easier as Tosh has the resources to properly validate new products and not be prone to launch day surprises. All this being said, I'm thinkin' there's no where to go but up for Ocz. Can't wait to see some Barefoot 3 drives using Tosh's 19nm toggle. Would really LOVE to see a line of BF3 + 19nm toggle based, bootable PCI-E drives. Also hoping Tosh (or Indilinx) will have an answer to the upcoming SF-3700 beast of a controller. Still can't believe Intel nuked sata express for the P97 chipset...that sux imo.batongxue - Tuesday, December 3, 2013 - link
DAT cheap!?djscrew - Wednesday, December 4, 2013 - link
Seems like a steal for their IP.Movieman420 - Wednesday, December 4, 2013 - link
Big steal. Hell....it cost Ocz $35M just to buy Indilinx. Tosh scored in a big way and this is gonna lead to some great hardware before long.