Hewlett Packard Enterprise is currently undergoing the process of purchasing flash-storage company Nimble Storage at a value of $12.50 a share. HP Enterprise will also pay out Nimble Storage’s unvested equity awards, worth about $200 million. This cash investment represents about a 45% premium of Nimble Storage’s closing price on Monday.
The deal is expected to close in April with a total estimated value of $1.2 billion, following from HPE’s purchase of SimpliVity in January, for $650 million. This comes following the rise in demand of flash storage, on behalf of the increasing popularity of the solid state drive (SSD) and it’s favourability over the traditional spinning disk drive. Whilst, early on, flash storage was seen as a performance accelerator for niche applications, more and more enterprise business and individual users are opting for mass flash storage in place of the hard disk drive.
The resulting demand for flash storage has caused availability of NAND technology to fall in recent years. HP Enterprise’s investment in Nimble Storage allows them take advantage of the resources and economies of scale that Nimble Storage has built since it was founded in 2007. This allows HP Enterprise to guarantee a consistent delivery of fast and reliable flash storage.
Additionally, by acquiring Nimble Storage, HP Enterprise will likely be able to decrease costs, whilst increasing production and research and development of flash storage for r range of enterprise applications.
As Antonio Neri, a spokesperson for Hewlett Packard Enterprise, states:
“We believe that Nimble’s entry to midrange predictive flash storage solutions, coupled with InfoSight, its leading predictive analytics technology, will strengthen HPE’s flash storage portfolio by expanding market reach and enabling a transformed, analytics-based customer experience. Together, we’ll be able to bring flash optimized data services, which provide the right balance of price, performance, and agility, to customers across SMB, Enterprise and Service Provider segments. In other words, we’ll have a comprehensive, best-in-class portfolio across the full range of the market.”