California-based flash-memory maker SanDisk Corporation has agreed to acquire Pliant Technology, a solid-state drive company, for around $327 million plus incentives.

The business of SanDisk was once primarily the retail sale of small storage cards and thumb drives. The company has thrived in the flash memory chip market, selling chips for smartphones, digital music players and tablets. By acquiring Pliant Tech, the company gets a foothold in the enterprise storage market.

Pliant Tech gives SanDisk a way into the solid-state drive, or SSD, market. The drives are used by businesses in data centers. Some observers expect the market to quintuple in the next five years.

A SanDisk senior vice president said, "We [thought we] could bring lot of the benefits of SanDisk's capabilities and marry them with the really great technology Pliant has introduced to customers and is the middle of ramping."

San Diego mergers and acquisitions attorneys note that more and more businesses are saving massive amounts of data, so the market for SSDs is likely to grow as well. SSDs cost more up front, but they allow faster retrieval of information, and consume less power than hard-disk drives.

Storage giants such as EMC Corp. are already customers of Pliant Tech. Pliant uses multi-level cell, or MLC, NAND flash, which makes their devices more cost efficient. SanDisk is counting on this to expand in the market.

Pliant Tech's products do not currently use SanDisk flash, but the two companies have been working to qualify SanDisk's memory in Pliant's products. That process typically takes a year.

Source: Yahoo! Finance "SNDK to acquire Pliant Tech" 5/16/2011