Hewlett Packard Enterprise Company (NYSE: HPE) announced to buy Nimble Storage, the slash memory maker, in a $1 billion deal.
HPE planned to pay $12.5 per share in cash for Nimble, or around $1.09 billion, which represents a 45% premium over $8.6 per share, Nimble’s closing price on Monday. In addition, HPE will pay out Nimble’s unvested equity awards of $200 million.
“This acquisition is exactly aligned with the strategy and capital allocation approach we've laid out,” Meg Whitman, the CEO of HPE, said in a statement. “We remain focused on high-growth and higher-margin segments of the market.”
After the deal, HPE will be able to expand the type of flash storage that offers to business customers. HPE has been trying to improve their data centers with hybrid public-private cloud computing systems. Meg said in the statement that they focused on high-growth and higher-margin segments of the market.
For Nimble, the deal with HPE could help it become profitable more quickly than expected. An analyst at RBC Capital Markets said that Nimble expected to become within the next six to eight quarters, however, the acquisition “driving profitability in a shorter time frame."
According to the estimates of International Data Corp, the market for flash storage was expected to be around $15 billion in 2016, and will increase to $20 billion by 2020.