Toshiba Acquired OCZ SSD Business

OCZ Technology Group, Inc. has signed an asset purchase agreement with Toshiba Corporation to acquire substantially all of OCZ’s assets in a chapter XI bankruptcy proceeding for $35 milllion.

Under this agreement Toshiba will acquire OCZ’s client and enterprise solid state drive business. OCZ will continue to operate and serve existing and future customers during this process. Toshiba has agreed to provide the company with DIP (Debtor-in-Possession) financing to ensure that there is adequate capital and flash supply to support the business during the contemplated sale period. The consummation of the asset purchase agreement is subject to an auction and approval by the bankruptcy court in the company’s bankruptcy case.

This acquisition will provide Toshiba with access to OCZ’s proprietary controllers, firmware and software, as well as the teams responsible for bringing these solutions to market, in addition to OCZ’s brand and sales channels. This opportunity will bring critical controller IP and NAND supply all under one global organization, allowing for an more robust and competitive solid state solution offering for all of OCZ’s and Toshiba’s mutual customers moving forward.

“Over the past year, OCZ has dealt with numerous issues which have stressed the company’s capital structure and operating model, posing a challenge to achieving near term profitability. The combination of NAND flash supply constraints and credit issues have impacted our ability to satisfy the demands of our customers; this combined with increased pricing pressure in our industry have contributed to our on-going operating losses. On an operational basis, we completed a complex investigation, several restructurings and a multi-year restatement that added to our working capital requirements,” stated Ralph Schmitt, CEO of OCZ. “We have been working diligently on this partnership with Toshiba and we believe that this is the best outcome under our current corporate conditions.”

“We are excited to participate in this opportunity. If our bid is successful, the combination of our leading NAND technology with OCZ’s SSD expertise will allow us to further strengthen Toshiba’s SSD business,” said Seiichi Mori, VP of Toshiba’s semiconductor and storage company and corporate VP of Toshiba. “We value OCZ’s SSD business and technology in both the consumer and enterprise markets, and we are confident that it will reinforce our capabilities and help us to secure leadership in the SSD market.”

This transaction has been approved by the board of directors of OCZ, and it is expected that the sale will close within approximately 60 days.

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