Why did HPE buy Nimble Storage?

On Tuesday, multinational IT Company Hewlett Packard Enterprise Co. announced its deal to acquire flash storage company Nimble Storage for a total of $1 billion, or $12.50 per share in cash, while also assuming Nimble’s unvested equity awards of $200 million upon the completion of the transaction.

Nimble Storage is a California-based provider of all-flash and a hybrid storage solution founded in 2007, and was publicly traded since 2013. It has over 10,000 customers worldwide and holds the highest Net Promoter Score in the storage industry.

According to HPE, it decided to acquire Nimble as it has the potential to advance HPE’s Hybrid IT strategy as well as strengthening its leadership in the flash storage market.

With Nimble’s technology under HPE, the IT Company will better access at Nimble’s all-flash and hybrid flash/disk array line which is in line with HPE’s 3PAR high-end arrays as well as entry-level MSA storage. HPE could also take advantage of Nimble’s InfoSight cloud-based monitoring and predictive analytics package. In addition to that, Nimble’s Cloud Volumes can provide portability between AWS and Azure.

“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 customer across every segment,” said HPE.

Several of the benefits from the combination of HPE and Nimble include better ability to provide seamless transfer of data as well as replicate hybrid flash and all-flash storage that meets IT demands, integrated data protection, effortless management of storage volumes, predictive support automation, quality of service controls and full stack analytics, increases sales specialist support, and a future-proofed technology platform supporting next-generation storage.

Meanwhile, Nimble can take advantage of the takeover bid to advance their company’s position in the market as a combined business.

“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,” stated Nimble Storage CEO Suresh Vasudevan.

Upon the news of HPE’s takeover of Nimble Storage, Nimble’s stock (NYSE: NMBL) skyrocketed in the market session at $12.58, up by 46.28%, or $3.98 per share. Although after the acquisition, NMBL stock will be delisted from the New York Stock Exchange, while its remaining shares will paid to its shareholders.

The deal is expected to close around April and will be accretive to HPE earnings in the first full year following the close. In accordance with the agreement, Nimble will merge with HPE’s subsidiary.

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