Fusion-IO, Inc. (FIO), Seagate Technology PLC (STX), EMC Corporation (EMC): Is This Tech Company an Acquisition Candidate?

Seagate Technology PLC (NASDAQ:STX) itself, however, is not without its problems. The company carries $2.74 billion in long term debt, against an asset base of $9.23 billion. The company’s profit history has been up-and-down, $2.83 billion in profits for the year ending in June of 2012 being followed by $1.84 billion in net income for the year just ended.

The high price being touted for Fusion-io assumes there would be other bidders. Are there? Yes.

EMC Corporation (NYSE:EMC) could easily outbid Seagate for Fusion-io. The company is, financially, much stronger than Seagate Technology PLC (NASDAQ:STX), and could immediately adapt Fusion-IO, Inc. (NYSE:FIO) subsystems and software to its own line of cloud hard drives, something PC makers like Apple are doing on their own, combining speedy flash with dirt cheap aluminum and software which makes the mutual advantages transparent to users. EMC Corporation (NYSE:EMC) in this case would be looking to match the move of Cisco, which now competes with it in storage, and which looks set to end its own alliance with EMC Corporation (NYSE:EMC) following the WhipTail purchase.

EMC Corporation (NYSE:EMC) carries a market cap of $56 billion, and has over $11 billion in cash and short-term investments on its books, so even a $2 billion buy of Fusion-io would be fairly easy to do. The company’s stock is also a highly desirable currency, given that it also owns 80% of VMware, the leader in virtualization, and a majority stake in the Pivotal Initiative, which is developing a cloud platform with help from General Electric.

Time To Buy

As a stand-alone company Fusion-io is not a great proposition, but as a take-out candidate this is a great idea. There are multiple buyers with a strategic interest in making the purchase, and Fusion-io should be a motivated seller as well.

Any play in merger candidates is speculative, but the risk here is lower than it is for many other companies I’ve seen.

The article Is This Tech Company an Acquisition Candidate? originally appeared on Fool.com and is written by Dana Blankenhorn.

Dana Blankenhorn has no position in any stocks mentioned. The Motley Fool owns shares of EMC.

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