Western Digital to Strategically Expand Its Position in Enterprise Solid State
Storage With the Acquisition of sTec, Inc.; Company to Be Fully Integrated
HGST to Deepen SSD Capabilities and Expertise with sTec IP and Engineering
SAN JOSE and SANTA ANA, Calif., June 24, 2013
SAN JOSE and SANTA ANA, Calif., June 24, 2013 /PRNewswire/ --Western
Digital^® Corporation (NASDAQ: WDC) and sTec, Inc. (NASDAQ: STEC) announced
today that they have entered into a definitive merger agreement under which
sTec, Inc., 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
"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
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.
A question and answer document related to the sTec acquisition is available on
the Western Digital website at www.wdc.com or click here. The companies are
not holding a conference call related to the acquisition; Western Digital will
provide additional commentary on its next quarterly results conference call
scheduled for Wednesday, July 24, after the close of the NASDAQ market.
About Western Digital Corporation
Western Digital Corporation (NASDAQ: WDC), Irvine, Calif., is a global
provider of products and services that empower people to create, manage,
experience and preserve digital content. Its subsidiaries design and
manufacture storage devices, networking equipment and home entertainment
products under the WD^®, HGST and G-Technology brands. Visit the Investor
section of the company's website (www.westerndigital.com) to access a variety
of financial and investor information.
HGST (formerly known as Hitachi Global Storage Technologies or Hitachi GST), a
Western Digital company (NASDAQ: WDC), develops advanced hard disk drives,
enterprise-class solid state drives, innovative external storage solutions and
services used to store, preserve and manage the world's most valued data.
Founded by the pioneers of hard drives, HGST provides high-value storage for a
broad range of market segments, including Enterprise, Desktop, Mobile
Computing, Consumer Electronics and Personal Storage. HGST was established in
2003 and maintains its U.S. headquarters in San Jose, California. For more
information, please visit the company's website at http://www.hgst.com.
About sTec, Inc.
sTec, Inc. is a leading global provider of enterprise-class, solid-state
storage solutions designed for the ever-growing performance, reliability and
endurance requirements of today's advanced data centers. The industry's first
company to deploy solid-state drives (SSDs) into large-scale enterprise
environments, sTec offers the industry's widest range of solid-state storage
solutions, which protect critical information for major business and
government organizations worldwide. Headquartered in Santa Ana, California,
sTec also serves the embedded and military/aerospace segments with SSDs for
industrial and rugged environments. For more information, visit
Forward Looking Statements
This press release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These forward-looking
statements include statements concerning benefits expected from the sTec
acquisition, the expected timing of the completion of the transaction and
management's anticipated plans and strategies for the sTec business. These
forward-looking statements are based on management's current expectations and
are subject to risks and uncertainties that could cause actual results to
differ materially from those expressed or implied in the forward-looking
statements, including failure to consummate or delay in consummating the
transaction; the possibility that the expected benefits of the transaction may
not materialize as expected; failure to successfully integrate the products,
technology, research and development capabilities, infrastructure and
employees of HGST and sTec; the impact of continued uncertainty and volatility
in global economic conditions; actions by competitors; business conditions and
growth in the various hard drive markets; and other risks and uncertainties
listed in Western Digital's and sTec's filings with the Securities and
Exchange Commission (the "SEC"), including Western Digital's recent Form 10-Q
filed with the SEC on May 3, 2013 and sTec's recent Form 10-Q filed with the
SEC on May 8, 2013, to which your attention is directed. Readers are cautioned
not to place undue reliance on these forward-looking statements, which speak
only as of the date hereof, and neither Western Digital nor sTec undertakes
any obligation to update these forward-looking statements to reflect
subsequent events or circumstances.
Additional Information about the Merger and Where to Find It
In connection with the proposed merger, sTec, Inc. will file a proxy statement
with the SEC. Additionally, sTec and Western Digital Corporation will file
other relevant materials in connection with the proposed acquisition of sTec.
The materials to be filed by sTec with the SEC may be obtained free of charge
at the SEC's website at www.sec.gov. Investors and security holders of sTec
are urged to read the proxy statement and the other relevant materials when
they become available before making any voting or investment decision with
respect to the proposed merger because they will contain important information
about the merger and the parties to the merger. sTec and its directors and
executive officers may be deemed to be participants in the solicitation of
proxies of sTec shareholders in connection with the proposed merger. Investors
and security holders may obtain more detailed information regarding the names,
affiliations and interests of certain of sTec's executive officers and
directors in the solicitation by reading the proxy statement relating to the
merger and other relevant materials filed with the SEC when they become
available. Additional information concerning sTec's directors and executive
officers, including their ownership of sTec's common stock, is set forth in
sTec's 2013 annual meeting proxy statement filed with the SEC on June 7, 2013
and will also be set forth in the proxy statement relating to the merger when
it becomes available.
Western Digital, WD, HGST and the WD and HGST logos are registered trademarks
in the U.S. and other countries. sTec and the sTec logo are either registered
trademarks or trademarks of sTec, Inc. in the U.S. and certain other
countries. Other marks may be mentioned herein that belong to other
SOURCE Western Digital Corp.
Contact: HGST Media, Jessica Kersey, HGST, +1-408-717-7924,
firstname.lastname@example.org, or WDC Investors, Bob Blair, Western Digital Corp.,
+1-949-672-7834, email@example.com, or sTec, Inc. Media, Jerry Steach,
Director, Public Relations, sTec, Inc., +1-415-222-9996, firstname.lastname@example.org
or sTec, Inc. Investors, Mitch Gellman, Vice President of Investor Relations,
sTec, Inc., +1-949-260-8328, email@example.com
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