Avago Technologies has announced a definitive agreement to acquire LSI Corporation for $6.6 billion in cash. Avago, who is currently a leading supplier in the wired infrastructure, wireless and industrial markets, has little exposure to the storage controller market that LSI is involved in. The combined assets make Avago more complete while taking advantage of several scaling benefits by folding LSI in.
Avago Technologies has announced a definitive agreement to acquire LSI Corporation for $6.6 billion in cash. Avago, who is currently a leading supplier in the wired infrastructure, wireless and industrial markets, has little exposure to the storage controller markets that LSI is involved in. The combined assets make Avago more complete while taking advantage of several scaling benefits by folding LSI in.
Avago clearly has their sites set on expanding their solutions for the data center. LSI offers complimentary products like hard drive and SSD controllers, LSI-branded PCIe storage solutions, HBAs, RAID cards and a bevy of other solutions for the communications and custom ASIC markets. While it remains to be seen what Avago does long term with the LSI brand, customers likely shouldn't expect and significant changes for years to come. LSI has excellent brand equity with both end users and OEMs and is a trusted component provider throughout the data center.
The deal is expected to close in the first half of 2014 and is subject to various regulatory and stockholder approvals. Avago will financier the buy with $1.0 billion of cash from the combined balance sheet, $4.6 billion in bank financing and a $1 billion convertible note investment from Silver Lake Partners.
