Western Digital to Acquire a Recording Heads Company

by Anton Shilov
07/24/2003 | 06:01 PM

Western Digital today announced that the bankruptcy court presiding over the assets of Read-Rite Corporation approved the sale to Western Digital of substantially all of the assets of Read-Rite, including its wafer fabrication operation in Fremont, California and an option to purchase its operations in Thailand.

The assets are being acquired for cash consideration of approximately $95.4 million. The Thailand operations have un-negotiated debt obligations of approximately $62 million. Western Digital said it intends to fund the acquisition through working capital. The transaction is expected to close within 10 days, subject to the terms of the sale order issued by the bankruptcy court.

Western Digital indicated that the planned acquisition is aimed at improving its access to recording head technologies over the long term and increasing its operational flexibility. In the near term, the company has secured adequate supply of recording heads for the foreseeable future, including 80GB technology, from merchant market suppliers.