HGST, a wholly owned subsidiary of Western Digital (NASDAQ:WDC), has entered into an agreement whereby HGST will acquire a 100% ownership stake in sTec (UNKNOWN:STEC.DL) in an all-cash transaction valued at $340 million, equal to $6.85 a share, the companies announced today.
According to the companies' press release, the deal "augments HGST's existing solid-state storage capabilities, accelerating its ability to expand its participation in the rapidly growing area of enterprise SSDs [solid state drives]." The STEC board of directors has unanimously agreed to the proposed buyout, and will recommend that its shareholders approve the deal.
HGST President Mike Cordano commented, "We are excited to welcome such a talented team of professionals to HGST, where their inventive spirit will be embraced and encouraged."
The deal is expected to close in either the third or fourth quarter of 2013, and is subject to customary closing conditions. The deal represents approximately $207 million in enterprise value, net of STEC's cash as of March 31. The $6.85 per share is a 91% premium over STEC's Friday closing stock price.
Fool contributor Tim Brugger has no position in any stocks mentioned. The Motley Fool owns shares of Western Digital. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.