by Anton Shilov
06/24/2013 | 02:08 PM
Western Digital Corp. and sTec 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.
"Solid state storage in the enterprise will play an increasingly strategic role in the future of Western Digital. 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," said Steve Milligan, president and chief executive officer of Western Digital.
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.
"This acquisition demonstrates HGST's ongoing commitment to the rapidly growing enterprise SSD segment, where we already have a successful product line. We are excited to welcome such a talented team of professionals to HGST, where their inventive spirit will be embraced and encouraged," said Mike Cordano, president of HGST.
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.
"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. 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," said Mark Moshayedi, president and chief executive officer of sTec.