Western Digital announced on Monday plans to acquire SSD maker sTec, Inc. for approximately $340 million in cash, or $6.85 per share. The company said sTec would be merged into the company's HGST division, and not interfere with its current commitment with Intel to jointly develop and deliver current and future SAS-based SSD products.
"sTec has strong engineering talent and intellectual property that will complement HGST technical expertise and capabilities," the company said. "HGST will continue to support existing sTec products and collaborate with its customers to understand their future requirements."
sTec's board of directors unanimously approved the merger agreement based on the unanimous recommendation of a special committee of independent directors of the board. However, the decision to be bought out by Western Digital now falls on its shareholders who are scheduled to conduct a meeting regarding the offered price and the merger itself.
"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," the company said. "Wells Fargo Securities, LLC has acted as the financial advisor to Western Digital and BofA Merrill Lynch has acted as the financial advisor to sTec in connection with this transaction."
Steve Milligan, president and chief executive officer of Western Digital, said this acquisition is one more building block in its strategy to capitalize on the dramatic changes within the storage industry by investing in SSDs and other high-growth storage products. Even more, SSD storage in the enterprise sector will play an increasingly strategic role in WD's future.
Closing of the acquisition, which is subject to customary conditions, is expected to occur in the third or fourth calendar quarter of 2013, the company said.