LSI’s Engenio storage business now a NetApp unit

LSI Corp. has announced the completion of the sale of its external storage systems business to NetApp Inc. for $480 million in cash, the Milpitas, Calif., company said in a May 9 statement.

Under the terms of the agreement announced in March, NetApp has purchased substantially all the assets of the LSI business, which develops and delivers Engenio external storage systems products and technology to a wide range of partners that provide storage solutions to end customers.

Engenio will operate as a NetApp business unit instead of a stand alone entity.

Proceeds from the sale are expected to fund purchases of LSI common stock under its previously announced $750 million stock repurchase program, LSI said.

With the transaction completed, NetApp gains an original equipment manufacturer business that generated $705 million in revenues in 2010 and further enables NetApp to diversify its channels to market and expand its market reach, a NetApp statement explained.

NetApp, of Sunnyvale,Calif., is a $4 billion data storage services company whose clients include the Defense, Health and Human Services and Homeland Security departments.