IBM launches first-ever start-up accelerator
The storage systems company is EMC's sixth acquisition in Israel.
After several months of intensive talks, EMC Corporation (NYSE: EMC) has acquired storage systems company XtremIO for $430 million. EMC confirmed the acquisition on Thursday with a brief statement saying, "XtremIO's all-Flash, scale-out, enterprise storage architecture was designed to leverage Flash memory. XtremIO technology will complement the range of EMC Flash-based systems and software stemming from EMC's early entry into the Flash storage market. The all-cash transaction is not expected to have a material impact to EMC GAAP or non-GAAP EPS for the full 2012 fiscal year."
"Globes" was the first to report the imminent acquisition several weeks ago.
XtremIO was founded by a group of Israeli high tech veterans including Aryeh Margi, a co-founder of M-Systems; Shuki Bruck, Yaron Segev, and CEO Ehud Rokach, a former senior executive at Orckit and CEO Corrigent.
The exit is an exceptional success for Israel's venture capital industry. The company was founded in 2009 and has raised only $25 million to date in two financing rounds. Founders and employees will also be sharing out a great deal of money. The company has offices in Herzliya and San Jose, California.
Investors also include venture capital funds and possibly one of the global storage giants which also invested in the Israeli company. The two best known investors in XtremIO are Jerusalem Venture Partners (JVP) and Giza Venture Capital, which each hold 20-30% of the start up, in other words returns of $100-150 million. Other investors include Battery Ventures and Lightspeed Ventures. The last fundraising round was in late 2011 and the company still probably has several million dollars left to spend from that.
The company has yet to generate revenue from its storage systems which are based on flash memory, and according to its website it is currently conducting trials with customers and potential partners. The system itself is not yet available and will only be completed later in 2012. While the talks for the acquisition have been exceptional in terms of the sums of money involved, nevertheless such a large amount is appropriate for the storage sector.
XtremIO is EMC's sixth acquisition in Israel and by far the largest. EMC operates an Israel R&D center with 700-800 employees (including a center for its VMware Inc. (NYSE: VMW) virtualization software subsidiary). Senior executives from EMC have been in Israel in recent months and have been holding acquisition talks with XtremIO. EMC CEO Joseph Tucci was in Israel in December and since then at least two senior executives have visited VMware - chief technology officer and senior VP Dr. Stephen Herrod and VP finance David Golden.
Published by Globes, Israel business news - www.globes-online.com - on May 10, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012
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