Silicon Motion Technology has announced that the company has entered into a definitive agreement to acquire Shannon Systems, a China-based supplier of enterprise-class PCIe SSD and storage array solutions.

Under the terms of the agreement, Silicon Motion will acquire Shannon for a total purchase price of US$57.5 million, which includes a combination of cash, equity and contingency payments. The transaction has been approved by the boards of directors of both companies, and is subject to customary closing conditions, including regulatory review and approval.

Silicon Motion expects to complete its Shannon acquisition by the end of July 2015.

"China has become the largest Internet market in the world and its Internet companies have already widely adopted SSDs for their data centers and hyperscale servers. More recently, Chinese corporates and government organizations have started using SSDs for data virtualization. These operators of corporate and Internet infrastructure have increasingly been turning to Shannon for world-class, locally developed and supported SSD solutions," said Wallace Kou, president and CEO of Silicon Motion.

"Shannon was co-founded by Xueshi Yang, Marvell's previous SSD controller architect and a Seagate veteran, with a mission of developing innovative and competitive enterprise SSD solutions in China. I am excited that upon closing, Xueshi will be joining Silicon Motion's executive team to continue spearheading enterprise SSD activities," Kou continued.

"By joining the world's leading merchant controller company and combining their extensive NAND flash controller expertise and overall corporate resources with our deep understanding of enterprise SSD systems and the Chinese storage market, we believe we can grow our R&D and sales infrastructure faster than we could before and accelerate the business momentum of Shannon' SSDs and flash storage arrays," said Yang, co-founder of Shannon.

Silicon Motion expects the impact of this acquisition to be slightly accretive to Silicon Motion's non-GAAP earnings per share in the second half of 2015 and more accretive in full-year 2016.