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HPE Closes $1 billion Nimble All Flash Array Storage Deal

HP Enterprise (HPE) has completed its $1 billion purchase of Nimble Storage (NBML) — the San Jose, California company that specializes in All Flash Array (AFA) storage.

The move expands HPE’s presence in the high-growth flash storage market, which is estimated to reach nearly $20 billion by 2020, up from about $15 billion in 2016.

HPE paid a huge premium of 45 percent — $12.50 per share — to acquire Nimble. The premium reflects Nimble’s growth potential and HPE’s own struggle to push beyond traditional IT infrastructure.

Nimble reported $117 million in revenue in the fourth quarter of 2016, an increase of 30 percent from the same period in 2015, while HPE’s Q4 revenues shrank among competitive pressure.

Meg Whitman Reshapes HPE

When the deal closed today, Nimble became a wholly-owned subsidiary of HPE. In addition to the $1 billion cash purchase, HPE assumed or paid out Nimble’s unvested equity awards of about $200 million.

The move is part of CEO Meg Whitman’s plan to transform HPE’s revenue mix. HPE acquired SimpliVity for HCI capabilities earlier this year. Also, the company has spun off its IT services business (merging it with CSC) and portions of its software business (merging it with Micro Focus).

HPE said the deal creates a comprehensive storage portfolio by bringing together Nimble’s predictive flash offerings for entry to mid-range customers and HPE’s scalable 3PAR, SimpliVity and MSA products for mid-range to high-end customers.

“This deal, in combination with our recent acquisitions, helps deliver on our vision of making hybrid IT simple for our customers,” Antonio Neri, executive vice president and general manager of HPE’s Enterprise Group, said in a statement.

Nimble’s Growth

Founded in 2007, Nimble has 1,300 employees. Total revenue for 2016 was $402 million, an increase of 25 percent from the prior year.

In addition to AFA storage, Nimble offers an enterprise-grade multi-cloud block storage service for Amazon Web Services (AWS) and Microsoft Azure that is billed as more durable than native cloud block storage.

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