Texas-based Pivot3 acquires homegrown NexGen Storage

LOUISVILLE — NexGen Storage — a homegrown Boulder County storage company one year removed from spinning off from Silicon Valley-based SanDisk — has been acquired once again.

Austin, Texas-based Pivot3 announced Wednesday that the company has acquired Louisville-based NexGen in an all-stock transaction. Both sides, however, characterized the deal as more of a merger that brings two companies with similar offerings together in a way that will allow them to accelerate growth.

NexGen makes hybrid flash-storage arrays capable of supporting multiple types of storage media. Pivot3’s chief executive Ron Nash said in a phone interview that the two companies have technology based on similar architecture, making the merger of the two a natural fit.

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“It was very easy to relate to the NexGen people,” said Nash, who said the combined company is projected to bring in roughly $50 million in revenue this year. “But they did a lot of innovative things that we did not have.”

The combined company will operate under the Pivot3 name, though Nash said the NexGen products will keep the names they have. All employees are expected to stay onboard with the company in their current locations. In addition to Austin and Louisville, Pivot3 has an office in Houston, as well as sales and marketing outposts around the world.

NexGen employs 86 people, a little more than half of who are at the company’s office at 361 Centennial Parkway in Louisville. Pivot3 employs 130.

John Spiers and Kelly Long — who helped start LeftHand Networks before selling it to Hewlett-Packard in 2008 for $360 million — co-founded NexGen in 2010. After raising a $10 million round of venture capital, the company was sold to Fusion-io in 2013 for $119 million. When SanDisk acquired Fusion-io 18 months later, NexGen’s offerings were seen as somewhat of a competing product to SanDisk’s own, and Spiers and Long were given the opportunity to spin the company off and take their technology with them, which they did in January of last year.

Spiers said Wednesday that NexGen hadn’t been seeking another acquisition. The company, he said, had been raising a venture capital round last year and had received a term sheet from Brian Smith at S3 Ventures in Austin. As Smith, an investor in Pivot3, learned more about NexGen, he suggested that it might make sense for Pivot3 and NexGen to work together given their synergies and similar paths, and the seeds of the merger were sown.

Spiers said NexGen had been growing quickly, with plans of hiring about 20 sales people to begin establishing markets overseas.

“With Pivot3, we have that right out of the chute,” Spiers said of Pivot3’s international presence.

Nash said the merger of the companies fills the hiring needs of each for now, but said the plan is to gradually add going forward as growth demands.

“It’s very synergistic and complementary,” Spiers said.