OCZ, a pioneering SSD maker that has fallen on hard times over the past couple of years, has signed a deal to be acquired by Toshiba.
OCZ, which last week said it would likely liquidate if it weren't acquired by Toshiba, signed a deal under which the Japanese electronics giant will acquire "substantially all of OCZ's assets in a Chapter 11 bankruptcy proceeding" for US$35 million (A$38.6 million), OCZ said in a statement.
The acquisition is not a done deal, as another company could make an acquisition bid for OCZ. The deal also is subject to bankruptcy court approval.
OCZ has been hurting financially for some time. Last October, OCZ appointed Ralph Schmitt as CEO and issued a revenue warning.
While OCZ used its previous memory experience to become one of the earliest stand-alone SSD manufacturers, the company has been working in an industry consolidating into a limited number of vendors with their own storage controller and NAND memory manufacturing capability. OCZ has depended on Toshiba as its primary NAND supplier, according to Jim Handy, an analyst with Object Analysis.
Handy last week wrote in a research newsletter that an acquisition would be good for both companies and turn Toshiba into a major SSD competitor.
"Toshiba has not had as strong of a presence in the SSD market as the company would like, and OCZ would give it strong technology and a respected name in the retail market. Meanwhile, Toshiba would give OCZ something that the fledgling firm has so far been unable to attain: a steady source of NAND supply at competitive prices. OCZ has had a difficult history of having to pay price premiums during NAND shortages owing to the company's consistently poor credit ratings," Handy wrote.
[Related: Toshiba eyes struggling SSD maker's assets]
Assuming the acquisition closes, Toshiba will receive access to OCZ's proprietary controllers, firmware and software, along with its respective engineering teams. It also would get OCZ's brand and sales channels, the company said in its statement.
While the deal is being finalized, OCZ plans to continue to operate and serve customers due to a debtor-in-possession financing agreement under which Toshiba will provide capital and flash memory to support OCZ.
OCZ expects the sale to close in about 60 days.
Seiichi Mori, vice president of Toshiba's Semiconductor and Storage Company and corporate vice president of Toshiba, said in a statement that Toshiba values OCZ's SSD business and technology and is confident it can use OCZ to secure SSD market leadership.
"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," Mori said in the statement.
OCZ was unable to respond to requests for more information by press time.