Hewlett Packard Enterprise (HPE) has acquired US-based Nimble Storage for $1.09 billion in cash. Nimble has a great product line-up consisting of data storage and flash drives. The acquisition will enable HPE to improve the presence in the emerging Flash Storage business significantly. Shortly after the announcement, the shares of Nimble climbed to $12.50, which is a 45.3 percent increase compared to last week's trading figures. Meanwhile, the stocks of HPE slumped after both companies entered into the deal.

HPE calculated sale value based on latest trends

As of November 30, 2016, the IIT-graduate owned storage company had total outstanding shares of 87.5 million. The deal value of $1.09 billion was calculated based on all the latest financial values. Furthermore, HPE will also take care of the equity awards that are unvested by Nimble to the tune of $200 million.

Industry analysts are of the opinion that the flash-based storage devices manufactured by Nimble will help HPE to cater to the requirements of customers irrespective of segments. Within few months, the company will be in a position to scale the operations quickly.

Flash storage market expected to grow huge by 2020

According to Meg Whitman, Chief Executive Officer of HPE, the company has been concentrating on specific areas such as storage, networking, and technology.

With the help of state of the art products developed by Nimble, the company will be able to surge ahead in its quest to become a leading player in the storage segment.

Based on a recently released report by IDC, the growth of the flash storage niche is expected to hit $20 billion by 2020.

Hence, the acquisition of a credible storage product company like Nimble will help HPE to enhance their earnings to a large extent.

Based in San Jose, California, Nimble Storage employs 500+ engineers with Suresh Vasudevan being the CEO of the company since its inception in 2007. The company was not doing well since the last one year with the shares falling drastically with a slump is overall sales.

With heavy competition from NetApp and EMC, the company was unable to grow as per the expected lines.

That said, Nimble Storage has not yet issued any notices regarding any imminent layoffs. It remains to be seen as to whether HPE will retain all the existing 500+ employees of the beleaguered storage company.