Western Digital plans $2.5 billion facility for Hitachi Global buy

By Sara Rosenberg

New York, March 7 - Western Digital Corp. has received a commitment for a $2.5 billion senior secured credit facility to help fund its acquisition of Hitachi Global Storage Technologies, company officials said in a conference call on Monday.

Bank of America Merrill Lynch is the lead bank on the deal.

The facility consists of a $500 million revolver and a $2 billion term loan that is expected to have a five-year tenor, officials remarked.

Officials went on to say that they anticipate having investment-grade type conditions on the loan.

In addition to funding the acquisition, proceeds from the credit facility will be used to refinance existing bank debt and for working capital, capital expenditures and other corporate purposes.

Under the agreement, Western Digital is buying Hitachi Global Storage Technologies from Hitachi Ltd. for $3.5 billion in cash and 25 million common shares valued at $750 million.

Closing is expected during the third quarter, subject to customary conditions, including regulatory approvals.

Western Digital is an Irvine, Calif.-based designer and producer of hard drives and solid state drives. Hitachi Global Storage Technologies is a San Jose, Calif.-based developer of hard disk drives, solid state drives and external storage solutions and services.

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