Toshiba Corp. and OCZ Technology Group on Friday announced that the U.S. Bankruptcy Court allowed the former to buy substantially all of the latter’s assets. The transaction is expected to close next week and from then OCZ will continue as a wholly-owned subsidiary of Toshiba. OCZ Technology Group continues its attempts to sell power supply unit business.
OCZ Technology was founded in 2002 and initially concentrated on high-performance memory modules. Throughout its history, the company expanded into new product segments and eventually changed its focus to solid-state drives (SSD). The firm quickly gained recognition as a provider of high-performance SSDs for PC enthusiasts, so it acquired Indilinx, an independent maker of SSD controllers, production capacities in Taiwan and intellectual property necessary to design SSDs for enterprise-class systems. While the company gained recognition on the market of server-class solid-state storage, several shareholder lawsuits revolved around questionable accounting practices during 2012 and subsequent issues with cash greatly undermined the company’s abilities to expand.
With restricted amount of cash, limited supply of NAND flash memory, dropping revenue and increasing losses, the company took a $30 million loan at a steep 15% interest rate from Hercules Technology Growth Capital, but failed to meet terms of the loan. In late November Hercules took control of the OCZ’s bank accounts, whereas the latter filed a petition for bankruptcy. In early December it was announced that Toshiba agreed to purchase SSD-related assets of OCZ for $35 million. Today, the court approved the deal.
With this asset purchase, the popular OCZ SSD brand supporting a complete portfolio of enterprise and consumer drives continues in full force leveraged by Toshiba’s financial strength and its portfolio of NAND flash memory.
“We are pleased by the court’s approval as this business combination allows the company to continue to bring to market disruptive solid state storage technology. We are appreciative of all the support provided by our shareholders, creditors, and vendors which allowed this combination to occur,” said Ralph Schmitt, CEO for OCZ Technology. “The OCZ team is excited to be a part of an innovative company like Toshiba where we can continue to develop new and unique SSD technologies that position the Company as a solid state solutions leader in both the client and enterprise storage markets.”
OCZ Technology Group is also in the process of going through a bidding procedure for the power management business (known under PC Power & Cooling brand) and expects to close a transaction within the next few weeks.
KitGuru Says: Every end is a new beginning, isn’t it? Perhaps, with Toshiba OCZ will become a more successful player on the SSD market?