Western Digital complete Hitachi GST takeover
Ryan Martin / 5 years ago
Western Digital today announced that it has completed its acquisition of Viviti Technologies (formerly Hitachi Global Storage Technologies), effective March the 8th, 2012, for $3.9 billion in cash and 25 million shares of Western Digital common stock valued at approximately $0.9 billion. Hitachi now owns approximately 10 percent of WDC shares outstanding, and it has the right to designate two individuals to the board of directors of WD.
The new WD will operate with WD Technologies (WD) and Hitachi GST as wholly owned subsidiaries. Aggregated revenues of the two companies in 2011 were $15 billion. As chief executive officer of WD, John Coyne heads up the new office of the CEO, with Steve Milligan as president, Tim Leyden as chief operating officer and Wolfgang Nickl as chief financial officer.
A recently updated HDD forecast by IDC predicts industry revenue growth at a compound annual growth rate of 8.6 percent per year from 2011 to 2016. “The growth in demand for digital storage continues unabated driven by the expansion of digital content in consumer and commercial applications,” said John Rydning, research vice president, hard disk drives & semiconductors, IDC. “Mobility, cloud infrastructure, social business, and big data analytics are stimulating demand for digital content in new formats and new market segments, creating the need for an increasingly diverse set of storage products and technology capabilities from storage solutions providers.”
The cash portion of the purchase price was financed by a $2.3 billion, five-year term loan, short-term financing under a $500 million revolving credit agreement and existing company cash balances. The company expects the transaction to be immediately accretive to earnings per share on a non-GAAP basis, excluding acquisition-related expenses, restructuring charges and amortization of intangibles. In addition, the company expects to maintain a positive net cash position.