Published On: March 11, 2012

Western Digital Completes Acquisition of Hitachi Technologies

Published On: March 11, 2012
Last Updated on: October 31, 2020
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Western Digital Completes Acquisition of Hitachi Technologies

Western Digital has long been a market leader in the company's fields, but the newest acquisition to the brand will surely help the company grow into that role even further than it currently is.

Western Digital Completes Acquisition of Hitachi Technologies

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Western-Digital-Acquires-Hitachi.jpgWestern Digital (WD) just announced that it has completed its acquisition of Viviti Technologies Ltd. (formerly Hitachi Global Storage Technologies), effective March 8, 2012, for $3.9 billion in cash and 25 million shares of WDC common stock valued at approximately $900 million. Hitachi now owns approximately 10 percent of WD shares outstanding, and it has the right to designate two individuals to the board of directors of WD.

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The new WD will operate with WD Technologies (WD) and HGST 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.

"The completion of this acquisition is a truly momentous event in the 42-year history of our company," said Coyne. "With ownership of two successful companies and the best talent available in the industry, we expect to accomplish great things as we build the new WD to be the world's leading storage solutions provider with the industry's deepest technology capability, broadest product portfolio and best-in-class execution. Similar to successful multi-brand models in other industries, the two subsidiaries will compete in the marketplace with separate brands and product lines while sharing common values of customer delight, value creation, consistent profitability and growth."

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.

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