MILPITAS, Calif. (AP) -- SanDisk is buying Fusion-io for about $1.1 billion as the flash-memory chip maker ramps up its storage business.
SanDisk will spend $11.25 per share, a 21 percent premium to Fusion-io's $9.28 closing price Friday.
Shares of Fusion-io Inc., whose chief scientist is Apple co-founder Steve Wozniak, jumped $2.11, or 22.7 percent, to $11.39 in afternoon trading.
"Fusion-io will accelerate our efforts to enable the flash-transformed data center, helping companies better manage increasingly heavy data workloads at a lower total cost of ownership," said SanDisk CEO Sanjay Mehrotra.
The Milpitas company said Monday it will use the cash it has on hand for the acquisition.
The acquisition is expected to add to SanDisk's earnings in the second half of fiscal 2015.
The boards of both companies have approved the deal, which is targeted to close in SanDisk's fiscal third quarter.
Shares of SanDisk Corp. gained $2.98, or 3 percent, to $101.45.