Reuters reports that shares of OCZ Technology Group spiked as much as 21-percent in early trade thanks to a rumor sparked by Fudzilla. The site claims that rival Seagate Technology has offered to buy the SSD maker for an undisclosed amount.
According to the Fudzilla report, "industry sources" claim that Seagate is one of many looking into a possible acquisition of OCZ. The HDD company reportedly plans to offer much more than the $308.5 million that Nasdaq currently values OCZ, which seems like mere chump change compared to Seagate's Nasdaq value of $11.71 billion.
If true, the rumored move would certainly accelerate Seagate's progression into the SSD market which has thus far been slow at best and rather late to the game. OCZ, which considers itself as the SSD expert, is somewhat years ahead of where Seagate needs to be. It realized the market shift years ago and quickly transformed itself from a core RAM company to one of today's premier SSD manufacturers.
For Seagate, this acquisition would make sense, even more so as the industry shifts away from platter-based storage solutions. Experts claim the OCZ acquisition will boost Seagate's margins and help it establish a firmer foothold in the lucrative enterprise segment. Meanwhile, OCZ would benefit from Seagate's massive capital that would enable the SSD company to meet consumer demand, a problem OCZ has reportedly encountered in the past.
It's also believed that Seagate will likely keep the OCZ brand if the SSD company is brought in-house. Yet there's a possibility that OCZ could continue on as a separate company -- yet still owned by Seagate -- in order to prevent disrupting its current momentum on the SSD market.
"It is plausible for Seagate or Micron to buy an SSD company," Benchmark Capital analyst Gary Mobley said. "Seagate has been late to address the flash storage market and needs to hedge its aging HDD business. Micron would benefit from owning OCZ by selling more NAND flash."
The Fudzilla report claimed that Micron is one of the companies considering an OCZ acquisition.
According to Reuters, shares of OCZ, which was valued at $308 million as of Wednesday's close, were trading up 22-percent at $5.57 on the Nasdaq. Thursday's gains added about $68 million to its market capitalization.