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Defunct flash-storage vendor OCZ Technology Group (OCZ) this afternoon announced that Toshiba (6502JP) will buy the company's assets out of bankruptcy for $35 million, including both OCZ's consumer business and its enterprise solid-state drive business. Toshiba is supplying financing to OCZ during the sale process to allow the company to continue to service customers.

Today's announcement is a follow-up to the announcement last Wednesday that the company was in talks with Toshiba.

OCZ's CEO, Ralph Schmitt said the combination would be the best outcome the company could hope for:

Over the past year, OCZ has dealt with numerous issues which have stressed the company's capital structure and operating model, posing a challenge to achieving near term profitability. The combination of NAND flash supply constraints and credit issues have impacted our ability to satisfy the demands of our customers; this combined with increased pricing pressure in our industry have contributed to our on-going operating losses. On an operational basis, we completed a complex investigation, several restructurings and a multi-year restatement that added significantly to our working capital requirements. We have been working diligently on this partnership with Toshiba and we believe that this is the best outcome under our current corporate conditions.

Toshiba head of semiconductor and storage Seiichi Mori said the deal would bolster Toshiba's flash memory storage business.

OCZ stock closed up 7 cents, or 60%, at 18 cents, after plunging last week on news of the deal. The shares rose briefly to about 22 cents in late trading ahead of the announcement, before backing off to the 14- to 16-cent range.

OCZ's business has been crumbling for over a year now, in part because of a lack of adequate supply of flash memory chips with which to produce its products. The company a year ago cut nearly a third of its workforce, and proceeded through several quarters of weaker-than-expected results and revenue restatements. Revenue this fiscal year ending in February is expected to fall by 55% to $149 million, where once analysts had predicted over a billion dollars.

The stock traded as high as $10.94 at one time, and last year was talked of as likely to be bought out by hard-drive maker Seagate Technology (STX).