In what could easily be written as one of the biggest acquisitions in the tech industry, and the biggest in the storage sector, popular hard drives maker Western Digital has announced, that it is acquiring flash memory storage company SanDisk in a deal worth a staggering $19 billion.
In a statement released minutes ago, Western Digital said,
The combination is the next step in the transformation of Western Digital into a storage solutions company with global scale, extensive product and technology assets, and deep expertise in non-volatile memory (NVM).
With this transaction, Western Digital will double its addressable market and expand its participation in higher-growth segments.
As for the financials involved, the offer values SanDisk common stock at $86.50 per share or a total equity value of approximately $19 billion, using a five-day volume weighted average price ending on October 20, 2015 of $79.60 per share of Western Digital common stock.
If the previously announced investment in Western Digital by Unisplendour Corporation Limited closes prior to this acquisition, Western Digital will pay $85.10 per share in cash and 0.0176 shares of Western Digital common stock per share of SanDisk common stock;
Western Digital, if you are surprisigly unaware, is one of the oldest companies to have come up in data storage. The company popularly known as WD, was founded in California in 1970 and currently claims to be clocking an annual revenue of over $15 Billion.
SanDisk on the other hand, came up in 1988, and today is more popularly known for its portable storage devices, which include SD cards for cameras and phones, as well as USB flash drives, and solid-state drives.
All in all, this $19 Billion acquisition, while obviously making sense, will unite one of the world’s largest physical data storage companies Western Digital, with world’s largest maker of flash storage devices SanDisk, thus creating a gargantuan of a data storage company.
Western Digital and SanDisk’s complementary product lines, including hard disk drives (“HDDs”), solid-state drives (“SSDs”), cloud datacenter storage solutions and flash storage solutions, will provide the foundation for a broader set of products and technologies from consumer to datacenter. Both companies have strong R&D and engineering capabilities and a rich base of fundamental technologies with over 15,000 combined patents issued or pending worldwide.
Talking about SanDisk’s long-standing collaboration with Toshiba, Western Digital said,
Toshiba has been a long-term strategic partner to SanDisk for 15 years. The joint venture (JV) with Toshiba will be ongoing, enabling vertical integration through a technology partnership driven by deep collaboration across design and process capabilities.
The transaction will be financed by a mix of cash, new debt financing and Western Digital stock. In connection with the transaction, Western Digital expects to enter into new debt facilities totaling $18.4 billion, including a $1.0 billion revolving credit facility.
FEATURED IMAGE : Paul Sawers / VentureBeat