FIO Fusion-io: Bloomberg discusses takeover in FIO
Western Digital is paying about $645 million for Virident, net of cash. While closely held Virident’s revenue wasn’t disclosed, Rajesh Ghai, a Dallas-based analyst at Craig-Hallum Capital Group LLC, said it’s probably less than $100 million, implying that Western Digital’s paying a minimum of 6 times revenue. The median multiple for memory-device deals in the last decade is 0.91 times sales, according to data compiled by Bloomberg.
Fusion-io’s enterprise value of $1.1 billion yesterday was just 2.5 times its revenue, data compiled by Bloomberg show. That’s after it slipped to a record low of 1.8 in August, the data show.
An offer for $18 a share would be a reasonable starting point for a bid,
. (EMC), the world’s biggest maker of storage computers, may be among other potential bidders for Fusion-io, Seyrafi of FBN Securities said. Dave Farmer, a spokesman at Hopkinton, Massachusetts-based EMC, said the company doesn’t comment on acquisition speculation.
“It’s not like Seagate’s the only one that would be interested,” Seyrafi said. “Fusion-io’s attractiveness as a takeout candidate has increased. It could be valuable within a larger entity.”
To contact the reporter on this story: Tara Lachapelle in New York at
For future potential growth in the space, it would travesty if FIO sells for $18. Why bother? FIO was 18 bucks just few months ago. For any deal to make sense for shareholders, it has to be in the region of 52 week high, give or take.