OCZ on the brink of bankruptcy, Toshiba poised to buy

OCZ Technology Group Inc. has announced that it has received an offer for a buyout from Toshiba Corporation, a last-minute offer that has stalled the company’s recent actions to file for bankruptcy.

On Wednesday, 27 November, OCZ’s shares tumbled by nearly 80% when the company announced that it would start filing for bankruptcy. OCZ, who also owns PC Power and Cooling, previously manufactured power supplies and system memory for computers, and dropped work on their other products to concentrate on the then-lucrative SSD market.

For the last five years the company has not posted a profit, and entered into agreements with financial institutions such as Hercules Technology Growth Capital Inc. and Deutsche Bank AG to lend the company money. OCZ attributes their weak performance to a supply shortage of NAND memory chips for their SSD products.

OCZ is now up for sale and Toshiba Corporation has made an offer to buy out the company. Toshiba is the last hard drive manufacturer left that has not yet dipped its toes into the SSD market properly, relying on external solutions to make up its products.

OCZ Vector 256GB

An acquisition for Toshiba would be to their benefit at this point, as the company previously announced plans to buy new equipment and enter into the SSD market on their own steam. Using OCZ’s existing IP and assets to jump into the market would allow Toshiba to enter into it as a strong contender right from the start.

In addition, it would fit into Toshiba’s existing plans to open up a fabrication plant to manufacture NAND memory chips and sell them off to their partners.

If Toshiba fails to buy out OCZ, however, the SSD maker will continue on its bankruptcy filing and liquidate its assets to pay off remaining debts.

Its the end of an era for OCZ. The company entered the computer industry in 2002 and sold a range of video cards, USB thumb drives and cooling solutions for desktop processors. The company expanded later on to produce power supplies and in 2007 bought out PC Power and Cooling to help bolster its lineup.

In 2008, OCZ entered the SSD market with the OCZ Core, which was priced aggressively against competitors from the likes of Kingston, SanDisk, Transcend and Intel. The company later abandoned the desktop and mobile memory markets, citing that growth was slowing down and resulted in their efforts not being profitable.

In 2012, the company was put in the spotlight after shareholders filed lawsuits against OCZ, alleging that the company was involved in irregular accounting practices.