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Toshiba Agrees to Acquire OCZ SSD Business

By - Source: OCZ Press Release | B 19 comments

The transaction should be final within 60 days.

Last week OCZ Technology group announced that due to its inability to comply with the terms of its loan with Hercules Technology Growth Capital, Inc., the SSD company was forced to file for bankruptcy. The depository accounts would be turned over to Hercules, and the company would be dissolved, not restructured.

"As previously reported, the Company is not in compliance with certain of the operating ratios and covenants in the loan agreement. As a result of such action and pursuant to Hercules' written instruction, the depository institutions disbursed the cash in the Company's respective accounts to accounts under the control of Hercules," stated OCZ's press release.

The company also announced that it received an offer from Toshiba Corporation to acquire substantially all of the company's assets in a bankruptcy proceeding. However, both parties have now reached an agreement, according to OCZ, where Toshiba will acquire OCZ's client and enterprise solid state drive business for $35 million in a chapter 11 bankruptcy proceeding.

"OCZ will continue to operate and serve existing and future customers during this process," states OCZ's press release. "Toshiba has agreed to provide the Company with DIP (Debtor-in-Possession) financing to ensure that there is adequate capital and flash supply to support the business during the contemplated sale period. The consummation of the asset purchase agreement is subject to an auction and approval by the bankruptcy court in the Company's bankruptcy case."

The acquisition will provide Toshiba with access to OCZ's proprietary controllers, firmware and software. The company will also have access to the teams responsible for bringing these solutions to market, in addition to OCZ's established brand and sales channels, the company said.

"This strategic opportunity will bring critical controller IP and NAND supply all under one global organization, allowing for an even more robust and competitive solid state solution offering for all of OCZ's and Toshiba's mutual customers moving forward," states the company's press release.

Ralph Schmitt, CEO of OCZ, points out that the company has suffered a tough year, facing NAND flash supply constraints and credit issues that have impacted OCZ's ability to satisfy the demands of its customers. These issues were combined with increased pricing pressure in the industry, which contributed to the company's on-going operating losses.

"On an operational basis, we completed a complex investigation, several restructurings and a multi-year restatement that added significantly to our working capital requirements," stated Schmitt. "We have been working diligently on this partnership with Toshiba and we believe that this is the best outcome under our current corporate conditions."

Seiichi Mori, Vice President of Toshiba's Semiconductor and Storage Company and Corporate Vice President of Toshiba, said that the deal will strengthen Toshiba's SSD business. Toshiba announced in a separate press release that the transaction will be completed through a sale and auction process pursuant to Section 363 of the U.S. Bankruptcy Code, and subject to approval by the bankruptcy court supervising OCZ Technology's Chapter 11 bankruptcy.

"If Toshiba is selected as the successful bidder, subject to court and other regulatory approvals, the company expects to complete the acquisition in January 2014," the press release stated.

Display 19 Comments.
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  • 2 Hide
    patrick47018 , December 3, 2013 5:01 PM
    I've always liked OCZ's products, I have a PC Power and Cooling PSU and that is a subsidiary of OCZ and I couldn't be happier with it
  • 1 Hide
    jimmysmitty , December 3, 2013 5:09 PM
    Quote:
    I've always liked OCZ's products, I have a PC Power and Cooling PSU and that is a subsidiary of OCZ and I couldn't be happier with it


    Their SSDs were not the best. They had some reliability issues and issues with firmware. They were cheap which was great for lowering the $1/GB but not good enough to keep them alive.
  • 0 Hide
    deadlockedworld , December 3, 2013 5:24 PM
    Quote:
    I've always liked OCZ's products, I have a PC Power and Cooling PSU and that is a subsidiary of OCZ and I couldn't be happier with it


    The PSU reputation came from PC Power and Cooling, not from OCZ. PC Power was one of the best long before they were bought by OCZ, which is more of a midrange brand.
  • -1 Hide
    computernerdforlife , December 3, 2013 5:54 PM
    It saddens me to read this while running vertex 3's across on all my PC's and laptops.
  • 0 Hide
    fudoka711 , December 3, 2013 6:04 PM
    Only $35 million for the entire ssd portion of the company. Ouch. I didn't realize it was worth that little, even in a bankruptcy filing.
  • 1 Hide
    jacobdrj , December 3, 2013 6:05 PM
    Most of my ssds are OCZ. I had an early g.skill and I now have a modern Toshiba, but I have generally fond memories of OCZ SSDs. But my favorite product of theirs was actually discontinued years ago. OCZ Trifecta was a quarter sized microsd adapter that worked in SD slots, USB ports and even worked with microsdhc cards before it broke. The first time it broke OCZ replaced it no questions asked...
  • -1 Hide
    gmax9000 , December 3, 2013 6:07 PM
    35 Million is surprisingly cheap for tech company like OCZ, I wonder why Toshiba wanted them so bad..
  • 1 Hide
    g-unit1111 , December 3, 2013 6:25 PM
    Quote:
    I've always liked OCZ's products, I have a PC Power and Cooling PSU and that is a subsidiary of OCZ and I couldn't be happier with it


    Yeah I have a Silencer MKII and a Vertex 4 in the same system and both have been great so far.
  • -1 Hide
    jacobdrj , December 3, 2013 6:36 PM
    Quote:
    35 Million is surprisingly cheap for tech company like OCZ, I wonder why Toshiba wanted them so bad..


    Intellectual property, and their foot in the door with enterprise class customers. While OCZ didn't get the market share of Intel or Samsung or even fusionIO, they still have some patents from their early foray into SSD tech and have some established customer base for the high end lucrative market, where Toshiba probably is lacking in both reputation and market presence.
  • 0 Hide
    f-14 , December 3, 2013 8:27 PM
    because the board and the CEO are on the take and there is some very dirty dirty money going on under the table.

    "Ralph Schmitt, CEO of OCZ, points out that the company has suffered a tough year, facing NAND flash supply constraints and credit issues that have impacted OCZ's ability to satisfy the demands of its customers."

    oh yes such a hard hard year with the tsunami and other earthquakes and monsoon in asia that literally stunted the HDD sector and caused prices of HDD to double and be almost as much as an SSD, yes that was such a hard year to recover from raking in money hand over fist.

    the only thing OCZ had a problem with was their quality control of their SSD's as a very large % of them failed very badly right out of the box if not 3 days to 3 weeks to 3 months later.

    $35 million dollars is a price so low they're braindead if not committing some kind of fraud/stock laundering deal with Toshiba. this is too good of a deal which makes it so suspicious it screams of a back alley rollex dealer in new york city
  • -3 Hide
    knowom , December 3, 2013 10:16 PM
    OCZ SSD's had terrible reliability issues I'm not shocked by this at all. OCZ's system memory business is a bit better, but honestly it's overpriced relative to value.

    Frankly I've never been inclined to buy any of there products, but I'm a pretty conscious tech shopper that values price to performance and reliability.

    On a side note this looks more than a little shady as if OCZ planned this all along go bankrupt and sell the company and suddenly all those SSD warranties evaporate.
  • 1 Hide
    George Lebers , December 3, 2013 10:43 PM
    I Have 3 OCZ SSD's in a PC (dual boot + VM) and a Toshba Laptop. All have been working perfectly for years. I am looking forward to getting a Toshiba OCZ SSD in the future.
  • 0 Hide
    m32 , December 4, 2013 1:51 AM
    Toshiba got it for cheap. Maybe we will hear about them more in the SSD game in the future.
  • -1 Hide
    gsxrme , December 4, 2013 5:18 AM
    Yes! Toshiba SSHD will be coming out soon! Western Digital Black SSHD is the only competition. Seagates SSHD is a joke. Is SSDs the future? No. Is HDD the future? No. But SSHD is where its at. Im so happy!
  • 0 Hide
    Marcus52 , December 4, 2013 6:29 AM
    I would rather Western Digital or Seagate had purchased OCZ, but this is really a very good thing. Just like Bigfoot's Killer NICs, quality control needed to happen. Qualcomm brought it to the Killer products, and I expect Toshiba will bring it to the OCZ technology.
  • 0 Hide
    RazberyBandit , December 4, 2013 1:54 PM
    @knowom
    OCZ ceased and closed its system memory business almost three full years ago...
  • 0 Hide
    Lutfij , December 4, 2013 3:54 PM
    I've had the pleasure of owning two kits of 4GB dimms by OCZ. The funny thing is, soon after purchasing the kits, news spread that they were shutting down their memory division for the same reason this article mentions above. I've kept my eye off their products since then and now I see their ssd's will be auctioned off , well maybe, and next thing you know it - their PSU's are on fire.

    Hope OCZ can come back in the game as they once were or maybe come back with a different title...?
  • 0 Hide
    Wierd657 , December 4, 2013 8:52 PM
    What about their PSU business?
  • 0 Hide
    rwinches , December 5, 2013 10:30 AM
    Toshiba's story is a sad one, they were at the top of state of the art in tech and their laptops were the ones to have. Then it was discovered that they sold secrets on noise suppression for submarines learned while working with the US Navy and got themselves banned from the US market for many years.

    OCZ was on the cutting edge of SSD tech and got burned a bit in the beginning, but their tech improved and is outstanding. IMO Their big mistake was the choice of not licensing 'proprietary controllers, firmware and software' in a budding industry. Survival means being in the game and they made a poor choice, they had proven tech which they could have marketed, tech which has a limited shelf life as the next big thing will come along.