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Western Digital Acquires Hard Drive Platter Manufacturer Komag

Discussion in 'News' started by malware, Jun 30, 2007.

  1. malware New Member

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    Western Digital Corporation (WD), and Komag, Incorporated (Komag) announced today that the two companies have entered into a definitive agreement for WD to acquire Komag for $32.25 in cash per share for a value of approximately $1 billion. The acquisition of Komag, a leading media manufacturer, will further strengthen WD’s position as a highly-efficient hard drive maker by integrating media, one of the critical technology components of a hard drive.

    The transaction will be structured as a cash tender offer for all the outstanding shares of Komag common stock, followed by a merger of a wholly-owned subsidiary of WD into Komag in which the remaining shareholders of Komag will receive $32.25 in cash. The transaction has been unanimously approved by the board of directors of each company and is subject to customary closing conditions, including regulatory approvals, and is expected to close in the third calendar quarter of 2007.

    WD will fund the transaction, including the expected retirement of Komag’s convertible notes due 2014, through a combination of the companies’ cash and proceeds from a senior secured term loan of up to $1.25 billion.

    “This acquisition is a significant step in the evolution and differentiation of WD as a leader in the worldwide hard drive industry,” said John Coyne, WD President and Chief Executive Officer. “Following the successful integration of the Read-Rite head assets since 2003, we are very excited by the opportunity to drive incremental profitability and efficiencies in the WD business model through the full integration of Komag’s media operation. This acquisition will enable WD to optimize synergies through the integration of heads and media, secure our long-term supply of media, and sharpen our ability to deliver high quality, highly reliable and cost-effective products to our customers. We believe that Komag’s highly-skilled employees, an industry-leading position with perpendicular magnetic recording media, and its operational excellence will further strengthen WD’s competitive position. Together, we have the right team to deliver on WD’s strategy to achieve profitable growth.”

    Tim Harris, Komag’s Chief Executive Officer stated, “We believe WD is the best partner for Komag and are very excited by the benefits this transaction delivers to both our shareholders and employees. In particular, we believe the transaction with WD provides our shareholders with an attractive price as well as value certainty. The acquisition of Komag by WD is the natural next step in the customer-supplier relationship between the two companies. WD is closely embedded as a customer in Komag’s processes and is uniquely positioned to benefit from the Komag media capabilities.”

    Tim Leyden, WD’s Executive Vice President of Finance, stated, “While the primary purpose of the acquisition is strategic in terms of access to technology and supply, we expect to realize meaningful cost benefits. Those cost benefits should enable the company to achieve incremental gross margin and net margin improvements before the amortization of acquisition-related intangibles within 12 months as we integrate Komag into our operations.”

    Source: Western Digital
     
  2. komag New Member

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    Me acquired by Western Digital :cry:
     
  3. WarEagleAU

    WarEagleAU Bird of Prey

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    Great news. As if HDDs werent cheap enough, this should allow for a slight price decrease and perhaps better quality.
     
  4. ChaoticBlankness

    ChaoticBlankness New Member

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    that would of been funny if you were a regular here.
     
  5. Dippyskoodlez

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    I would have to agree. I wonder if Komag makes platters for other companies?
     

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