Storage biz wants to store a minnow in its bulging belly
The all-flash array biz is to sell privately-placed convertible notes to institutional buyers for $450m and will also grant initial purchasers the option to buy another $67.5m, solely to cover over-allotments.
The money will be used, in part, to pay for the repurchase of $20m worth of Class A Common Stock and a portion of the net proceeds will be used for “the acquisition of, or investment in, technologies, solutions or businesses that complement its business,” Pure said.
Pure added it has made no commitments with potential targets “at this time”.
At the end of Pure’s Q4 ended 31 January it had $244.1m in cash and cash equivalents, plus $353.3m in marketable securities, leaving a total of $597.4m.
Add in greenbacks from the notes and Pure has a decent amount of dosh to play with.
The firm’s portfolio includes a mainstream FlashArray primary data storage product line, a growing unstructured data FlashBlade system, and it has just rolled out AIRI, a FlashBlade plus Nvidia GPU system. Where to next?
Aaron Rakers, a senior analyst at Wells Fargo, suggested: “The company’s deep engineering (e.g. software-focused) capabilities would leave us to view Pure’s potential M&A strategy as more technology / software tuck-in focused vs. transformational.”
He questioned if Pure will scan the data protection space for targets and pointed towards declining flash prices enabling fresh market opportunities. Pure has agreements with Commvault, Veeam and others for their data protection software to be integrated with Pure’s products.
Other potential areas might be in the management of distributed clusters of Pure systems, and memory/storage technology between flash and DRAM. This could speed up the operation of its arrays.
We understand Pure looks favourably on MRAM where startup companies like Everspin and Spin Transfer Technologies are actively developing products. ®