Western Digital Corp. has announced that wholly-owned subsidiary HGST (formerly Hitachi Global Storage Technologies) has acquired sTec, Inc. for around $340 million in cash. sTec’s enterprise SSD engineering expertise, application acceleration software experience and intellectual property will complement that of HGST.
With enterprise being the other growth market for SSDs (beside mobile devices), HGST will now be able to more rapidly expand its participation in this market segment. HGST currently has a highly successful joint venture with Intel Corp., which it will remain fully committed to for supplying SAS-based SSDs. HGST will continue to support existing sTec products, and will establish relationships with sTec customers to help understand their current and future storage requirements.
According to Steve Milligan, president and chief executive officer of WD, “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.”
And Mike Corado, president of HGST, states that “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.”
sTec’s president and chief executive officer Mark Moshayedi observes that “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.”
sTec’s board of directors has unanimously approved this merger agreement, and will encourage shareholders to approve the merger. Wells Fargo Securities, LLC has acted as WD’s financial advisor for this transaction; and BofA Merrill Lynch has represented sTec’s financial interests. The deal is expected to finalize in Q3 or Q4 of this year, subject to standard regulatory approvals.
The Western Digital press release on the sTec acquisition can be viewed in its entirety here.