Toshiba Saves Bankrupt OCZ With £21m Buyout

Toshiba has confirmed market reports after it announced it has acquired the assets of the financially troubled solid-state storage maker OCZ Technology.

The deal, confirmed 2 December, sees Toshiba paying $35 million (£21m) for the company after it revealed last week that it would file for bankruptcy.

Enterprise SSD

Toshiba, the original developer of NAND and NOR flash back in the late 1980s, said it will be incorporating OCZ’s client base and enterprise solid state drive business into its own, and that the sale is expected to close in January.

OCZ’s stock was selling for 16 cents (£0.09) on 3 December. The San Jose, California-based company had received $13.1 million (£7.9m) in debt funding three months ago.

Its main products are its 2.5-inch Agility flash drives and the VeloDrive PCI-Express Solid-State Drive. OCZ drives are used for desktop and laptop memory, flash media, power supplies, cooling products, and peripherals.

Eleven-year-old OCZ had taken a total of $47 million (£28.7m) in venture funding over the years and been losing more than $100 million (£61m) a year for the past couple of years. It had only about $70 million (£43m) in total assets left, storage analyst Howard Marks wrote in his blog.

As part of the deal, Toshiba said it will provide OCZ with the funding it needs to pay debts, buy additional NAND flash media and support existing customers during the transition. Toshiba did not say whether it will continue OCZ’s service-level agreements with customers after the close of the deal.

Supply Problems

Toshiba said it will retain most, if not all, of the OCZ employee base and take over all of its established brand and sales channels.

OCZ Chief Executive Ralph Schmidt said in a statement released by Toshiba that credit issues and problems with the supply of NAND flash were the causes for the company’s financial downturn. He didn’t mention the increasingly competitive solid-state drive market that includes huge international competitors such as No. 1 flash producer Samsung, WD, Seagate, SanDisk, Intel and several others.

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Originally published on eWeek.