Western Digital’s Subsidiary HGST Acquiring sTec Inc.

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sTecOn Monday, Western Digital announced a merger with sTec, an innovator in enterprise solid-state drives. The company is set to be acquired by HGST, an owned subsidiary of Western Digital. Western Digital is set to acquire sTec for $340 million equating to roughly $6.85 per share, which represents approximately $207 million in enterprise value, net of sTec’s cash as of March 31, 2013.

The pending acquisition would help to augment HGST’s existing enterprise SSD capabilities, allowing the company to participate in the rapidly growing area of enterprise SSDs. HGST will remain committed to its joint development program with Intel(R) Corp. and will continue to deliver current and future SAS-based products with Intel.

Wells Fargo Securities has acted as WD’s financial advisor and Bank of America Merill Lynch has acted as an advisor for sTec. The acquisition is still pending subject to customary conditions, and is expected to go through later this year in Q3 or Q4.

 

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