NetApp to Purchase Engenio External Storage Systems Business of LSI Corporation
March 09 2011 - 4:00PM
Marketwired
NetApp (NASDAQ: NTAP) today announced that it has entered into a
definitive agreement to purchase the Engenio® external storage
systems business of LSI Corporation (NYSE: LSI), a publicly held
company headquartered in Milpitas, California, in an all-cash
transaction for $480 million. The close is anticipated to occur in
approximately 60 days subject to customary closing conditions. The
transaction is expected to be accretive to NetApp's GAAP and
non-GAAP earnings per share by the end of the second quarter of its
2012 fiscal year.
Two of the trends that are driving rapid growth in the storage
industry include virtualization and high performance, big bandwidth
applications. Today, NetApp is the innovation leader for shared,
virtualized IT infrastructures, delivering exceptional efficiency
and flexibility for customers' next-generation data centers.
Engenio will enable NetApp to address emerging and fast-growing
market segments such as video, including full-motion video capture
and digital video surveillance, as well as high performance
computing applications, such as genomics sequencing and scientific
research. NetApp has the channel reach and customer relationships
today that require high performance and big bandwidth capabilities
that will be well served by Engenio's storage platform. These
segments are expected to collectively represent a $5 billion
incremental market opportunity by 2014. The Engenio acquisition
will also enable NetApp to expand its market reach with a mature
OEM business that will further diversify its channels to market,
especially in markets it currently doesn't address, such as
server-attached and embedded storage.
Executive Quotes Tom Georgens, president
and CEO, NetApp "We're excited about the acquisition of the Engenio
business and the opportunity to significantly expand our
addressable market and generate greater revenue growth. Our
customers and partners have helped us emerge as an innovation
leader and one of the fastest growing storage vendors in shared,
virtualized IT infrastructures. With Engenio we will have a
strategic storage platform to capitalize on new, high-growth
opportunities that we don't currently reach with our FAS platform.
NetApp also gains a proven OEM-based revenue stream that is run by
a talented Engenio team. We believe that the synergies between
NetApp and Engenio will create a compelling combination that will
help us continue to scale our business and fuel our continued
growth."
Abhi Talwalkar, president and CEO, LSI Corporation "With its
singular focus on storage, NetApp is well positioned to enhance the
value of the Engenio business and enable new growth opportunities.
NetApp's channel-friendly approach is highly synergistic with the
Engenio model of enabling partner and customer success, and the
combination should further advance the Engenio storage platform, as
well as augment the OEM channels that have been the foundation of
its longstanding success."
People and Organizational
- NetApp gains a talented team from Engenio with engineering
expertise that will continue to develop the Engenio platform and
enable NetApp to capitalize on the new market opportunities that
will fuel its growth. In addition, NetApp gains a team that is
skilled at managing a mature, proven OEM business model with key
industry partners.
- The Engenio business unit will be integrated into NetApp's
business functions and will be responsible for product development
under Manish Goel, executive vice president of NetApp Product
Operations. The NetApp and Engenio sales teams will be combined to
maximize opportunities for the Engenio platform.
Webcast Conference Call Information NetApp
will host a conference call today, Wednesday, March 9, 2011, at
2:00 p.m. Pacific Time to provide more details about the
transaction. The call will be broadcast live on the Internet at
investors.netapp.com. This press release and any other information
related to the call will also be posted on the Web site at that
location. An audio replay Webcast will be available after 4:00 p.m.
Pacific time on our Web site. The conference call will also be
available live in a listen-only format at (888) 895-5479 in the
United States and (847) 619-6250 outside the United States. The
pass code for both numbers is "NetApp."
Forward-Looking Statements This press
release contains forward-looking statements, which involve a number
of risks and uncertainties. NetApp and LSI Corporation caution
readers that any forward-looking information is not a guarantee of
future performance and that actual results could differ materially
from those contained in the forward-looking information. All such
forward-looking statements include, but are not limited to,
statements about the benefits of NetApp's purchase of the Engenio
external storage systems business of LSI Corporation, including
future financial and operating results, NetApp's plans, objectives,
expectations and intentions, potential market opportunity, and
other statements that are not historical facts.
The following factors, among others, could cause actual results
to differ from those set forth in the forward-looking statements:
the ability to obtain regulatory approvals of the transaction on
the proposed terms and schedule; the risk that the businesses will
not be integrated successfully; the risk that the cost savings and
any other synergies or expected benefits from the transaction may
not be fully realized or may take longer to realize than expected;
disruption from the transaction making it more difficult to
maintain relationships with customers, employees, or suppliers; and
competition and its effect on pricing, spending, third-party
relationships, and revenues. Additional factors that may affect
future results are contained in NetApp filings with the SEC, which
are available at the SEC's Web site: http://www.sec.gov. NetApp
disclaims any obligation to update and revise statements contained
in these materials based on new information or otherwise.
About LSI Corporation LSI Corporation
(NYSE: LSI) is a leading provider of innovative silicon, systems
and software technologies that enable products which seamlessly
bring people, information and digital content together. The company
offers a broad portfolio of capabilities and services including
custom and standard product ICs, adapters, systems and software
that are trusted by the world's best known brands to power leading
solutions in the Storage and Networking markets. More information
is available at www.lsi.com.
About NetApp NetApp creates innovative
storage and data management solutions that deliver outstanding cost
efficiency and accelerate business breakthroughs. Discover our
passion for helping companies around the world go further, faster
at www.netapp.com.
Trademarks NetApp, the NetApp logo, and Go
further, faster are trademarks or registered trademarks of NetApp,
Inc. in the United States and other/or countries. All other brands
or products are trademarks or registered trademarks of their
respective holders and should be treated as such.
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Press Contacts: NetApp PR Hotline Ph: (408) 822-3287
xdl-uspr@netapp.com LSI Corporation Mitch Seigle Ph: (408) 954-3225
mitch.seigle@lsi.com Investor Contacts: NetApp Shauna
O'Boyle Ph: (408) 882-7655
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