Western Digital Acquires sTec for Enterprise SSD Market
An interesting move in the storage arena today. WD announced today that they have entered into a definitive merger agreement under which sTec, an early innovator in enterprise solid-state drives (SSDs), will be acquired by HGST, a wholly-owned subsidiary of Western Digital. sTec will be acquired for approximately $340 million in cash, which equates to $6.85 per share. This represents approximately $207 million in enterprise value, net of sTec's cash as of March 31, 2013.
The pending acquisition augments HGST's existing solid-state storage capabilities, accelerating its ability to expand its participation in the rapidly growing area of enterprise SSDs. HGST remains committed to its highly successful joint development program with Intel Corp. and will continue to deliver current and future SAS-based SSD products with Intel.
sTec has strong engineering talent and intellectual property that will complement HGST technical expertise and capabilities. HGST will continue to support existing sTec products and collaborate with its customers to understand their future requirements.
"Solid state storage in the enterprise will play an increasingly strategic role in the future of Western Digital," said Steve Milligan, president and chief executive officer, Western Digital Corporation. "This acquisition is one more building block in our strategy to capitalize on the dramatic changes within the storage industry by investing in SSDs and other high-growth storage products."
"This acquisition demonstrates HGST's ongoing commitment to the rapidly growing enterprise SSD segment, where we already have a successful product line," said Mike Cordano, president, HGST. "We are excited to welcome such a talented team of professionals to HGST, where their inventive spirit will be embraced and encouraged."
"At this key point in the evolution of the storage industry, sTec is excited to consummate this transaction. It will be an important next step in proliferating many of the innovative products and technologies that sTec has been known for throughout its 23-year history and provides immediate value for our shareholders and a strong future for our employees and customers," said Mark Moshayedi, president and chief executive officer, sTec. "This merger will enable our world-class engineering team and IP to continue to make a significant contribution to the high-performance enterprise SSD space that has long been sTec's focus."
The board of directors of sTec, on the unanimous recommendation of a special committee of independent directors of the board, has unanimously approved the merger agreement and has resolved to recommend that sTec shareholders approve the transaction at a sTec shareholders meeting to be held to approve the merger agreement and the merger. The directors and executive officers of sTec have entered into separate voting agreements under which they have agreed, subject to certain exceptions, to vote their respective shares in favor of the proposed transaction.
Wells Fargo Securities, LLC has acted as the financial advisor to Western Digital and BofA Merrill Lynch has acted as the financial advisor to sTec in connection with this transaction.
Closing of the acquisition, which is subject to customary conditions, is expected to occur in the third or fourth calendar quarter of 2013.
Western Digital Se Line of Hard Drives - 05/28/2013 02:06 PM
WD announced availability of its innovative WD Se line of hard drives, the first designed for scale-out datacenter deployments. Built on an enterprise-grade platform for reliable 24x7x365 datacenter o...
Western Digitals first 1.5TB 2.5-inch HDD - 05/21/2013 11:23 AM
Western Digital's HGST division announced the launch of world's first 9.5mm thick 2.5" HDD with a capacity of 1.5TB. The Travelstar 5K1500 features three platters with 500GB each, it spins at ...
Western Digital My Passport Ultra USB 3.0 Portable Hard Drives - 05/18/2013 08:52 AM
Western Digital released a new line of USB 3.0 portable hard drives, the My Passport Ultra. Available in 500GB, 1TB and 2TB capacities, these ultra-compact hard drives come with a USB 3.0 connection i...
Western Digital WD TV Play Media Player - 02/15/2013 08:45 AM
Stream popular internet channels, as well as personal photos, music and movies from other networked devices in the home, directly to your HDTV with Western Digital&rsquo;s latest WD TV Play media ...
Western Digital WD MyBook AV-TV External Hard Drive - 02/14/2013 08:36 AM
WD introduced My Book AV-TV, allowing customers to instantly enable their TV recording features to store and playback hundreds of hours of entertainment by simply connecting the My Book AV-TV drive di...