Q3 2014 Storage M&A and Funding Highlights

Q3 2014 Storage M&A and Funding remained strong!

M&A remained healthy with 9 transactions totaling roughly $500M in    consideration – 7 of the transactions were strategic technology based transactions, one business based deal (Sepaton/HDS) and one divestiture (CA Arcserve/Marlin Equity)

Acronis came back on the M&A radar acquiring Backup Agent and nScaled

SASI is advised C2C Systems in the sale to Barracuda, their first transaction as a public company

Other notable deals include Microsoft acquiring Inmage and EMC acquiring TwinStrata

Storage related funding was strong with 18 rounds totaling $546M – Box and Nutanix led the quarter with $150M and $140M rounds respectively

Similar to Q3 2013, Systems accounts for the most of the funding in Q3 2014 – Systems funding included flash/SSD players Pure Storage, PernixData, Skyera, and new comer NVMdurance and converged systems from Scale Computing and Nutanix.

Object storage funding was secured by later stage start-ups Amplidata and Caringo.

Cloud funding remained hot with Platform9, Nasuni, Cloudian, Box and CTERA.

There was venture funding across a wide range of technologies and disruptive     business models demonstrating that this segment has more “Flash” than just flash based systems and is likely to remain relevant and active into the foreseeable    future.

SASI advices C2C Systems on the sale to Barracuda Networks

Strategic Advisory Services International, LLC (SASI) is pleased to announce that C2C Systems (C2C) has been acquired by Barracuda Networks, Inc. (Barracuda). SASI served as exclusive financial advisor to C2C. Terms of the transaction were not disclosed.

SASI Role:
SASI introduced the key executives involved in the transaction and drove critical aspects of the M&A process from initial technology validation, to letters of intent through final closing agreements. Keys to success included SASI’s longstanding relationship with Barracuda, managing cross border issues arising from a U.K. based seller and a U.S. public buyer, and lastly, working closely with both parties on the combined product strategy and integration roadmap.

Barracuda Perspective on C2C Acquisition:
Barracuda’s acquisition of C2C Systems allows the company to offer customers a more complete information management and archiving product portfolio to simplify IT and control storage costs. The companies’ shared philosophy around simplicity and customer experience provides customers with extended value across the expanded archiving portfolio, which now includes file and message archiving, eDiscovery, and PST management solutions. This addition enables Barracuda to help eliminate risks associated with distributed PST files, reduce eDiscovery overhead via information management and early investigation, and support information management and governance initiatives via extended retention management policies. (Source: Barracuda press release 09/09/14)

About Barracuda (NYSE: CUDA):
Barracuda provides cloud-connected security and storage solutions that simplify IT. These powerful, easy-to-use, and affordable solutions are trusted by more than 150,000 organizations worldwide and are delivered in appliance, virtual appliance, cloud, and hybrid deployments. Barracuda’s customer-centric business model focuses on delivering high-value, subscription-based IT solutions that provide end-to-end network and data security. For additional information, please visit www.barracuda.com.

About SASI:
SASI is a boutique M&A advisory firm focused on serving private technology companies. Please visit http://www.sasillc.com for more information.

SASI Insights from the 2014 Flash Memory Summit

Flash Memory Highlights:

Flash memory combined venture funding for 2011 to 2013 tops $1B with $300M invested in just the first 6 months of 2014. M&A has also been very active with 9 deals in 2013 totaling over $2B in consideration. M&A remains hot with 4 deals through the first 6 months 2014 totaling $1.7B in consideration.

SASI Insights:

•   There is plenty of venture fuel left in the tank
•   Expect more funding at both ends of the IT spectrum
•   Later stage rounds will dominate with fewer A rounds
•   M&A likely to remain hot for the next 12 to 18 months
•   Expect some fantastic exits and some fantastic failures
•   Yep, there is a bubble here but do not expect a loud pop