M&A: Avago grabs … LSI … ?

Avago, a spinout from Agilent which was a spinout from HP, just bought LSI. Avago is largely a supplier of components to a variety of industries, dealing with modules, optoelectronics, etc.

If you look at their product mix, you see effectively zero overlap with LSI. They are not even in, arguably, the same markets.

I am scratching my head over this one. I could see it as a play to gain a foothold into the storage space. Or as an entry point for further growth outside of their core.

I guess time will tell as to what happens, as the integration plays out. What will be kept, and what will be killed. The SSD area is something that LSI has been working hard at with the Nytro series, though they don’t have a high-end tie-up with a flash vendor. Their RAID cards are competent, and their HBAs are reasonably good. They have SAN capability, and some other bits. Definitely a good company with a good product mix. We use them for a number of things.

Does this cast uncertainty over their future? I am not sure, and I am not worried. We don’t have a critical business dependency upon them. Most of their other customers are likely looking at this and scratching their heads as well. I don’t really see an issue with the acquisition unless good useful things get whacked. Which I’ve seen from other acquirers in the past.

I don’t get the “why” part yet, but I am sure they will explain at some point.

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