NetApp to Buy SolidFire -- Update

By Josh Beckerman 

NetApp has agreed to buy data-storage startup SolidFire Inc. for $870 million, adding a participant in a sector that has gained prominence as many businesses turn to flash storage rather than hard drives.

Well-funded storage startups have been a threat to technology giants such as NetApp, International Business Machines Corp. and Hewlett-Packard Co.

"With SolidFire, NetApp will now have all-flash offerings that address each of the three largest all-flash array market segments," NetApp said Monday.

The deal is expected to close during NetApp's fiscal fourth quarter.

In late 2014, SolidFire raised $82 million in financing from backers including Greenspring Associates, increasing total funding to $150 million.

Based in Boulder, Colo., SolidFire was founded in 2010 by Chief Executive Dave Wright, whose previous company, JungleDisk Inc. was acquired by Rackspace Inc. Mr. Wright will lead the SolidFire product line with NetApp.

In May, NetApp said it would lay off about 500 workers, about 4% of its workforce, as it struggled with the shift to cloud-based storage and a major product-line overhaul.

Cantor Fitzgerald said in a May downgrade that NetApp faced "execution/transition issues" and a competitive market. Baird upgraded NetApp in October.

On June 1, the Sunnyvale, Calif., company said Tom Georgens was stepping down as chairman and chief executive. George Kurian was promoted to CEO from executive vice president of product operations.

In the second quarter ended Oct. 30, NetApp's earnings fell from a year ago but still came in better than expected, as the company continued to increase its digital focus.

Write to Josh Beckerman at [e-mail]

(END) Dow Jones Newswires

December 21, 2015 17:41 ET (22:41 GMT)

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