LSI Corp. (LSI) agreed to sell its external storage systems
business to NetApp Inc. (NTAP) for $480 million, as the
storage-chip maker also said its board authorized a new
stock-repurchase program of up to $750 million.
Under the terms of the all-cash deal, data-storage company
NetApp will purchase substantially all of the assets of LSI's
external storage systems business, which develops and delivers
Engenio external storage system products and technologies. The
business being purchased generated $705 million in revenue last
year.
LSI's RAID adapter business, which develops storage controllers
and software for direct-attached storage environments, will remain
with LSI. LSI said upon closing, most LSI external storage systems
employees are expected to join NetApp. NetApp President and Chief
Executive Tom Georgens said the deal will expand the company's
market reach.
For its part, LSI said it moved to sell the business so it could
focus on becoming a pure-play semiconductor company, a strategy LSI
said can maximize long-term shareholder value.
LSI has returned to the black in recent quarters after a string
of losses on a rebound in business spending on information
technology. The company has gone through a transformation in recent
years, turning itself from a diversified chip maker with handset
and manufacturing operations, and now focuses on pure-play storage
and networking semiconductors.
Shares of LSI closed down 1.9% to $6.13 and were inactive in
after-hours trading. NetApp's shares were down 0.3% at $51.40 after
hours.
-By John Kell, Dow Jones Newswires; 212-416-2480;
john.kell@dowjones.com