Smart Modular to be acquired by Silver Lake

Silver Lake Partners and Silver Lake Sumeru have agreed to purchase memory module and solid-state drive maker Smart Modular Technologies Inc. for $9.25 per share in cash. The sale is estimated to be worth $645 million.

Silver Lake is expected to take Smart private. Under the terms of the agreement, Smart's shareholders will receive $9.25 in cash for each share of Smart common stock they own. The completion of the transaction is subject to customary closing conditions, including receipt of shareholder and regulatory approval. The closing of the transaction is expected to occur in the third calendar quarter of 2011.

"As a private company, we believe we will have greater flexibility to deliver to our customers the benefits of our long-term strategies, while managing the volatility of the DRAM cycles that have continued and will continue to be part of our business model," said Iain MacKenzie, president and CEO of Smart Modular, in a statement.

In March, Smart reported its results. Net sales for the second quarter of fiscal 2011 were $170.5 million, compared to $216.4 million for the first quarter of fiscal 2011, and $160.1 million for the second quarter of fiscal 2010.

On a GAAP basis, net income for the second quarter of fiscal 2011 was $0.2 million or $0.00 per diluted share, compared to $8.0 million or $0.12 per diluted share for the first quarter of fiscal 2011, and $16.1 million or $0.25 per diluted share for the second quarter of fiscal 2010. The second quarter of fiscal 2011 net income of $0.2 million includes restructuring charges of $2.8 million related to the closure of the company's Puerto Rico facility.

For the third quarter of fiscal 2011, Smart expects net sales will be in the range of $160 to $180 million and gross profit will be in the range of $29 to $33 million. Net income per diluted share is expected to be in the range of $0.04 to $0.07 on a GAAP basis.

Earlier this month, Smart announced the release of its second generation of XceedIOPS serial ATA (SATA) SSDs. The XceedIOPS2 SATA SSD is available in 1.8- and 2.5-inch form factors for enterprise storage and server systems.

Equipped with the latest SandForce SF-2000 series SSD processor and a 6Gbps SATA interface, the XceedIOPS2 enterprise-class SSD is optimized for use in high-volume virtualized storage applications. Available in densities from 50 to 400GB, the new XceedIOPS2 SATA SSD delivers high random performance of 60K IOPS and sequential performance of 520MB/s.

- Mark LaPedus
??EE Times