NetApp snaps up LSI storage line

Vendor to buyout rival's external storage arm for $480m

Storage vendor LSI has agreed to sell off its external storage systems business to rival NetApp in a deal worth $480m (£297m).

LSI specialises in the manufacture of Raid and host bus adapters. It said the deal will allow it to focus on growing the semiconductor part of its business.

Abhi Talwalkar, president of LSI, said: "Going forward as a pure-play storage and networking seminconductor company, we believe we can accelerate the achievement of our current business model and deliver greater long-term shareholder value."

The deal will see NetApp acquire all of LSI's external storage systems business, which is responsible for the production of the vendor's Engenio product line, and most of the division's staff.

LSI claims its external storage system generated revenues of $705m in 2010. The firm's 3Ware and MegaRaid portfolio are not included in the deal.

Talwalkar said achieving growth in the external storage systems market required a high level of investment, which NetApp will be able to provide.

"We believe that NetApp is well positioned to provide the needed technologies, grow the external systems business and better serve our customers," he added.

Tom Georgens, chief executive of NetApp, said the vendor plans to put LSI's OEM partnerships to good use.

"NetApp will build upon the success of the Engenio storage platform and OEM busisness mode to expand our total addressable market," he added.

"We are excited about the talented team that will join NetApp and the valuable OEM partner relationships we are committed to supporting and making successful."