Seagate Technology plc (NASDAQ: STX), a world leader in storage solutions, today announced its participation in the consortium led by Bain Capital Private Equity that has entered into an agreement with Toshiba Corporation to acquire Toshiba Memory Corporation (“Toshiba Memory”).
In the agreement, Seagate has committed to provide up to $1.25 billion in financing to support the acquisition, to be provided at closing, which is expected by March 2018. In addition, Seagate expects to enter into a long-term NAND supply agreement with Toshiba Memory that will provide continuity of raw NAND for Seagate’s expanding SSD product portfolio. Seagate expects this transaction to be accretive to its earnings.
“Over the course of many years, Seagate has developed an excellent long-term relationship with Toshiba Memory, and we have always been impressed with their consistent leadership in advancing NAND technology,” said Steve Luczo, Seagate’s chairman and chief executive officer. “We are pleased and honored to be part of the Bain Capital consortium and to help facilitate maintaining Toshiba Memory as a world leading independent NAND technology company. We know that Bain Capital is dedicated to the long-term success of Toshiba Memory and believe this acquisition is in the long-term best interests of our industry and of storage customers worldwide.”
Luczo continued, “In the coming years, the storage industry will see significant data creation and increased storage needs, and we must be able to support those demands. Our NAND supply agreement with Toshiba Memory will enable Seagate to continue innovating and providing customers with storage solutions that fit their needs, be they HDDs, SSDs, or hybrid solutions.”
“Seagate has developed its NAND storage technology portfolio over the last five years and today the Company has a broad offering of flash-based products that are ready to scale and grow across multiple markets,” said Dave Mosley Seagate’s president and chief operating officer. “Bolstering Seagate’s NAND supply through a long-term agreement with Toshiba Memory increases the potential for meaningful future revenue growth from Seagate’s SSD storage portfolio while providing significant value for our storage customers.”
Centerview Partners is acting as financial advisor to Seagate and Wilson Sonsini Goodrich & Rosati Professional Corporation is acting as its legal advisor.