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Toshiba Agrees to Acquire OCZ SSD Business

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.

  • patrick47018
    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
    Reply
  • jimmysmitty
    12093198 said:
    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.
    Reply
  • deadlockedworld
    12093198 said:
    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.
    Reply
  • computernerdforlife
    It saddens me to read this while running vertex 3's across on all my PC's and laptops.
    Reply
  • fudoka711
    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.
    Reply
  • jacobdrj
    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...
    Reply
  • gmax9000
    35 Million is surprisingly cheap for tech company like OCZ, I wonder why Toshiba wanted them so bad..
    Reply
  • g-unit1111
    12093198 said:
    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.
    Reply
  • jacobdrj
    12093639 said:
    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.
    Reply
  • f-14
    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
    Reply