When former Intel Corp. executive Abhi Talwalkar took the reins of legendary Silicon Valley chipmaker LSI Logic Corp. in 2005, he had big shoes to fill and his work cut out for him.

He replaced chip industry legend Wilf Corrigan, who founded LSI in 1980, inheriting a company that needed to focus on key markets and realign its business model. Talwalkar set about shedding LSI's manufacturing operations, and then struck the company's biggest deal ever, the $4 billion purchase of Agere Systems Inc. in 2007. As LSI digested Agere, the streamlining wasn't over. The company announced earlier this year the divestiture of its storage systems business for $480 million to NetApp Inc.

Now it looks like the chipmaker is primed to return to its once-active pursuit of sizable acquisitions. On Oct. 26, the company, now known as LSI Corp., announced a $322 million agreement to buy SandForce Inc., a privately held developer of processors for the storage market. It's the company's first significant deal in a couple years, and marks the completion of Talwalkar's latest readjustment to the changing data storage market that is now LSI's bread and butter, says treasurer Bob Brown.

"Our balance sheet is in great shape, we got all our debt paid off and have quite a bit of cash," Brown says. "With our strategy firmly set, it opened up more possibilities down the road to continue to look at M&A."

The deal follows a lot of hard work on LSI's most recent divestitures, which the company undertook largely because of the way storage equipment system makers were returning to more vertically integrated models.

"They want to own more of the intellectual property themselves," Brown says. "We didn't have a direct sales force there [storage systems], so we concluded it was better to sell that business."

The divestiture to NetApp absorbed much of LSI's attention for the latter half of 2010 and the early part of this year. But once the unit was off the books, LSI was in a good position to refocus on growth.

SandForce designs chips for enterprise-class, flash-based storage drives, a fast-growing market. LSI already was familiar with SandForce. Through a small corporate venture fund managed by Brown's team, the chipmaker had in 2009 invested in the startup, which counts as well Canaan Partners, DCM, Storm Ventures LLC, TransLink Capital and UMC Capital Corp. among its backers. SandForce's components are also designed into LSI's Warp Drive, a solid-state, hard-drive product that competes with technology similar to that of Fusion-io Inc., which went public over the summer.

"It was a try-before-you-buy situation," Brown says. "It is a management team we knew very well; we've been through the legal and financial due diligence with these guys."

An 11-year LSI veteran, Brown has seen a lot of changes at the company. He started his career as a bank analyst but moved to the network server division at Hewlett-Packard Co. in 1992, eventually joining the company's treasury department and corporate development team, where he met current LSI chief financial officer Bryon Look.

Brown left to work at Internet travel startup GetThere Inc. in 1999. After he helped to sell it a year later, Look, already at LSI, saw an article about the deal in The Wall Street Journal and called the soon-to-be-jobless Brown to offer him a post at the chipmaker.

Brown credits Talwalkar with turning LSI into a more streamlined and competitive player in the cutthroat chip market. "In the middle part of the last decade, we lost a little of our competitiveness," Brown says. "But now it feels like we are strategically in a better position than ever."

Much like a startup that brings in operational expertise once it reaches a certain point in its growth, Talwalkar's experience as a vice president in Intel's digital enterprise group brought a management style and structure that differed from the more top-down "founder mentality" provided by Corrigan.

"Abhi brings very broad, well-­organized strategy and marketing analysis that comes from a large-company approach," Brown says. "LSI has benefited from that."