by Anton Shilov
04/27/2010 | 11:19 PM
Western Digital Corp. said Tuedsay that it had agreed to purchase the magnetic media sputtering operations of Hoya Corp. and Hoya Magnetics Singapore ¥22 billion yen (approximately $235 million) in an all-cash transaction. WD believes that the acquisition will enable it to manufacture circa 80% of finished media production in-house, in particular, it would provide a more secure supply line of 2.5” glass substrates
The agreement includes a multi-year commitment for glass substrate supply related to these operations from Hoya, solidifying WD's access to a key component for its 2.5” hard drive business and further enhancing the ongoing partnership between the companies. The acquisition will augment WD's existing magnetic media operations, strengthening its ability to meet anticipated growth in demand for hard drives in the years ahead.
What is very important is that Hoya’s capacities will substitute for planned WD internal capacity additions. The Hoya media facility is productive and well run, however, WD believes that it can bring additional synergies and improvements through scale and the leverage of single-customer focus, just as the company did with both head and prior media acquisitions.
WD is acquiring the facilities, equipment, intellectual property and working capital of Hoya's media sputtering operations, based in Tuas, Singapore, where it expects to employ the entire current workforce. Certain related equipment at Hoya's Nagasaka, Japan, research and development facilities is included. The acquisition is expected to close in the current calendar quarter.
"This investment will enhance WD's ability to support our customers' growth. In addition to these assets, WD will also gain highly skilled and knowledgeable employees, valuable intellectual property and access to Singapore's deep academic and technology resources. We expect a seamless transition with the integration of this well-run operation into WD, enabling immediate support of anticipated hard drive demand growth in 2010 and beyond,” said John Coyne, president and chief executive officer of WD.