Steve Wozniak's Troubled Company, Fusion-io, Is Being Rescued By A $1.1 Billion Acquisition

SanDisk, a company that makes flash memory chips, has agreed to buy Fusion-io, one of the first companies to build enterprise storage using flash, for $1.1 billion.

It agreed to pay $11.25 per share, a 21% premium over Fusion-io's stock price at the close of business Friday and a brilliant soft-landing for Fusion-io, which spent 2013 in a tailspin.

Fusion-io was a 2011 IPO darling well-known as the employer of Apple co-founder Steve Wozniak, the company's chief scientist.

But things started to unravel for the company in 2012 when it admitted publicly that it was heavily reliant on just two customers: Facebook and Apple. They accounted for about 50% of revenues at the time and both companies said they had plenty of flash storage and would buy less in the future.

Months later, in the spring of 2013, the two co-founders suddenly left the company, David Flynn (CEO) and Rick White (CMO). In the coming months, other execs would leave, too, its CFO, Dennis Wolf, and its chief sales offer, James Dawson.

When Flynn left, the board hired Shane Robison as CEO, previously Hewlett-Packard's chief strategy officer.

HP was Fusion-io's third-biggest customer. But HP also sells enterprise storage, and had just launched its own line of flash storage products that compete with Fusion-io.

Robison left HP in 2011, about the time HP removed CEO Leo Apotheker and hired Meg Whitman. Months later, Whitman publicly blamed Robison for HP's mess with Autonomy, a company it acquired for $11 billion during Apotheker's reign, writing off $8.8 billion on it less than a year later amidst ugly accusations that HP had somehow been duped it into paying too much.

Despite the public browbeating, Robison was still well respected at HP, sources told Business Insider, and managed to keep Fusion-io's relationship with HP from falling off a cliff.

In fact, just last week, the two companies announced that HP would be the first company to sell Fusion-io's latest and great storage system to customers that bought HP's servers. That's an amazing accomplishment since HP is also trying to sell its own competing 3PAR flash storage systems to those same customers.

As nice as that is, Fusion-io wasn't exactly prospering in a market that now had all kinds of competition. Everyone from startups to established enterprise hardware makers are now selling enterprise flash storage systems. Analysts were expecting Fusion-io to report annual revenues down over 10% year-year-year, according to Yahoo Finance.

With the acquisition, founder David Flynn did extremely well. He controlled over 6% of the company, or about 6.6 million shares, according to the latest proxy documents filed with the SEC. That stake is worth over $74 million.

That's icing on the cake for Flynn. After leaving Fusion-io, he and co-founder White turned around and launched another startup, Primary Data. It's already raised $60 million in venture funds. It is still in stealth, but we know it's another storage startup.

It's hard to say how much money Robison did for his one year as CEO. He owned about 170,399 shares of Fusion-io, worth $1.9 million with the acquisition, according to trading forms. But he was due to be granted hundreds of the thousands more shares as part of a golden parachute or if the company changed hands.

Let's just say, he did well for himself, too.

Meanwhile, we don't know if Woz will stick with Fusion-io/SanDisk or move on. He hasn't tweeted anything about the deal yet.