Hewlett Packard Enterprise to buy data storage provider Nimble Storage for $1 bn

Hewlett Packard Enterprise Co (HPE) yesterday struck a deal to buy data storage provider Nimble Storage Inc for $1 billion in cash, in order to expand its presence in the high-growth and higher-margin flash storage market.

Under the terms of the deal, HPE is paying $12.50 a share, a 41 per cent premium to Nimble's Monday closing price.

In addition to the purchase price, HPE will assume or pay out Nimble's unvested equity awards, with a value of approximately $200 million at closing.
Nimble stockholders holding around 21 per cent stake, have agreed to tender their shares to the offer.

Founded in 2007 by Indian immigrants, Varun Mehta and Umesh Maheshwari, Nimble Storage is a predictive flash storage technology company which produces hardware and software products for data storage, specifically data storage arrays that use the iSCSI and Fibre Channel protocols and includes data backup and data protection features.

The California-based company had raised funds from investors like Accel Partners, Lightspeed Venture Partners, Sequoia Capital, Artis Capital Management and GGV Capital, went public in 2013.

The company has over an estmated 10,000 customers. It employs over 2,000 people and has annual revenues of $402 million.

Flash storage is a fast-growing market and the overall flash market was estimated to be approximately $15 billion in 2016 and is expected to be nearly $20 billion by 2020, with the all-flash segment growing at a nearly 17 per cent compound annual growth rate.

Nimble's predictive flash offerings for the entry to midrange segments are complementary to HPE's scalable midrange to high-end 3PAR solutions and affordable MSA products. This deal will enable HPE to deliver a full range of superior flash storage solutions for customers across every segment.

Nimble's chief executive and co-founder Varun Mehta, who holds around 8 per cent stake in the company, is set to make more than $87 million  from the sale, while Umesh Maheshwari, holding around 5.5 per cent stake, will get more than $60 million from the acquisition.