Notice on the Signing of a Share Purchase Agreement with a Bain Capital-Led Consortium for the Sale of Toshiba Memory

  Notice on the Signing of a Share Purchase Agreement with a Bain Capital-Led
  Consortium for the Sale of Toshiba Memory Corporation

Business Wire

TOKYO -- September 28, 2017

Toshiba Corporation’s Board of Directors (TOKYO:6502) (Toshiba), as announced
on September 20, 2017, “Notice on the Sale of Toshiba Memory Corporation,” has
approved the sale of all shares of Toshiba Memory Corporation (TMC), a wholly
owned subsidiary of Toshiba, to K.K. Pangea (Pangea), a special purpose
acquisition company formed and controlled by a Bain Capital Private Equity, LP
(including its affiliates, Bain Capital)-led consortium (the Consortium).
Today, Toshiba has entered into a Share Purchase Agreement (SPA) with Pangea.
An outline of the agreement follows.

1.   Names of Seller and Purchaser  
     Seller: Toshiba Corporation     Purchaser: K.K. Pangea

2.   Target Shares
     All shares of TMC

3.   Purchase Price
     Two trillion yen
     This amount is based on estimated debt, working capital, and capital
     expenditures by Toshiba and TMC. Any discrepancy with actual figures will
     be addressed by a purchase price adjustment determined after the closing
     of the share purchase.
     If the shares held by Toshiba in three joint venture entities* are not
     transferred to TMC, the estimated value of such shares in the joint
     ventures as of the end of the month before closing will be deducted as a
     purchase price adjustment.
     *Flash Partners, Ltd., Flash Alliance, Ltd. and Flash Forward, Ltd. are
     three joint ventures between Toshiba, SanDisk LLC, a subsidiary of
     Western Digital Corporation, and certain SanDisk subsidiaries for the
     joint investment in equipment used at TMC’s Yokkaichi facilities in the
     production of NAND Flash Memory.

4.   Outline of Investment in Pangea
     Pangea will fund the acquisition of TMC directly or indirectly from:
     Toshiba 350.5 billion yen (re-investment); Bain Capital 212 billion yen;
     Hoya Corporation (Hoya) 27 billion yen; SK hynix, Inc. (SK hynix) 395
     billion yen; US investors 415.5 billion yen. In addition, Pangea intends
     to secure loans in the amount of approximately 600 billion yen from
     financial institutions and banks.
     US investors are comprised of Apple Inc., Kingston Technology
     Corporation, Seagate Technology plc, and Dell Technologies Capital.
     With Toshiba and Hoya’s investments, Japan-based companies will hold more
     than 50% of the common stock in Pangea, and going forward Japan-based
     companies will continue to hold a majority. After the TMC shares are
     transferred to Pangea, Bain Capital and TMC management will lead TMC’s
     business operations to secure continuous growth.
     The US investors will not acquire any common stock or voting rights over
     TMC. In addition, SK hynix will be firewalled from accessing TMC
     proprietary information and will not permitted to own more than 15% of
     the voting rights in Pangea or TMC for a period of 10 years as provided
     by the terms of the agreement.
     Innovation Network Corporation of Japan (INCJ) and Development Bank of
     Japan Inc. (DBJ), which operate as neutral, independent organizations
     dedicated to promoting industrial competitiveness, have also expressed
     their interest in investing in Pangea or TMC at a later time, subject to
     satisfaction of certain conditions. Toshiba plans to leave
     decision-making in respect of the exercise of a portion of its voting
     rights held in Pangea to INCJ and DBJ, while Toshiba will retain the
     right to exercise these voting rights in its own discretion in certain

5.   Fundamental Conditions for Execution of the TMC Share Transfer
     (1)   Securing antitrust approvals in certain jurisdictions
     (2)   Securing certain approvals in respect of national security
     (3)   No prohibition of the share transfer by a governmental authority
           (for reasons other than (1) above)
     (4)   Agreement to the share transfer by the general meeting of Toshiba
           shareholders, under Article 467 (1) (ii) of Japan’s Companies Act

    Western Digital Corporation (Western Digital) has sought to prevent a
    transfer of Toshiba’s interests in certain Joint Ventures between Toshiba
    and SanDisk LLC (SanDisk), a subsidiary of Western Digital, to any third
    party. Toshiba and SanDisk are currently engaged in litigation and
    arbitration. The SPA contemplates that the sale of TMC will be consummated
    even if the Joint Venture interests have not been transferred to TMC prior
    to the closing, unless the transfer of TMC’s stock itself is blocked by an
    injunctive order.
    Upon satisfaction of all conditions, the closing of the share transfer
    will be on the first business day of the month immediately following the
    month in which the conditions are satisfied or waived. If such conditions
    are not satisfied or waived at least 11 business days prior to the first
    business day of such month, then the closing shall take place on the first
    business day of the following month. If the conditions are satisfied or
    waived during the period starting on February 15, 2018 and ending on the
    end of March 23, 2018, the closing shall occur on March 30, 2018.
    The SPA requires both Toshiba and Pangea to use their reasonable best
    efforts so as to complete the closing (including obtaining certain
    approvals from lease investors, cooperating on settling imposts and taxes
    after the share transaction, and taking measures to secure certain loans
    to Pangea), and Toshiba intends to close by the end of March 2018.

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Media Contact
Toshiba Corporation
Kaori Hiraki, +81-3-3457-2100
Public Relations & Investor Relations Division
Fax: +81-3-5444-9202
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