HPE Acquires Nimble Storage for $1 Billion to Boost Storage Portfolio March 2017

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HPE reached an agreement to acquire predictive flash storage company Nimble Storage, allowing it to boost its storage offerings for entry and midrange customers across all its business segments. HPE will pay $1 billion, or $12.50 per share, and assume or pay out an additional $200 million in unvested equity awards for Nimble, according to a Tuesday announcement.

Nimble's predictive all-flash and hybrid-flash storage products will fit in between HPE's higher-end 3PAR and its entry-level MSA and StoreVirtual solutions. The flash storage market is expected to grow from $15 billion in 2016 to $20 billion in 2020, and all-flash will grow at a 17 percent CAGR, according to IDC. HPE reported a 13 percent decline in revenue from its storage business in the last quarter as the company adapts to widespread enterprise cloud and hybrid IT adoption.

The deal also gives HPE Nimble's InfoSight Predictive Analytic Platform, which it will incorporate across its storage portfolio. InfoSight automatically detects 90 percent of customer infrastructure issues, and resolves over 85 percent of them, according to the announcement. Nimble also recently introduced multicloud storage services.

“We made the shift to the all-flash datacenter several years ago as the industry was exiting the first flash storage wave where performance was the only design and helped usher in the second wave where the blend of performance, economics, and data services enabled mainstream flash adoption,” SVP and GM of Storage and Big Data for HPE Bill Philbin said in a blog post. “We’re at the cusp of the third-wave of flash where the ‘new normal’ requires deeper application integration, automation up and down the IT stack, embedded risk management, and a futureproof approach to managing IT investments.”

Nimble was founded in 2007, and its revenue grew 25 percent to $402 million in its last fiscal year.  The company is based in San Jose, and employs 1,300 people globally. It had a succesful IPO in 2013, and its shares quickly soared to a peak over $50 early in 2014, but actually traded briefly below $6 in February 2016. HPE's offer represents a 45 percent premium on Nimble's closing share price Monday.

"Over 10,000 enterprises are using Nimble Storage because our Predictive Cloud Platform is reliably fast, radically simple, and cloud ready," said Suresh Vasudevan, CEO at Nimble Storage. "This acquisition validates our technology leadership in flash and in the use of cloud-based predictive analytics. We're confident that by combining Nimble Storage's technology leadership with HPE's global distribution strength, strong brand, and enterprise relationships, we're creating expansion opportunities for the combined company."

Lenovo announced an alliance with Nimble in October 2016, and said in a statement that Tuesday's announcement would have “virtually no impact” on its customers or product portfolio, as it had not advanced beyond early stages. Lenovo said it plans to introduce new flash storage offerings later this year.

The deal is expected to officially close in April, at which point Nimble will be delisted from the New York Stock Exchange.