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Western Digital plans $18.4 billion in new debt for SanDisk purchase
By Sara Rosenberg
New York, Oct. 21 – Western Digital Corp. expects to enter into $18.4 billion in new debt facilities to help fund its acquisition of SanDisk Corp. and refinance existing debt at both companies, according to a news release.
The new debt includes plans for a $1 billion revolver.
Bank of America Merrill Lynch, J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC and RBC Capital Markets LLC are the leads on the debt.
Other funds for the transaction will come from cash on hand and Western Digital stock.
Gross debt will be 3.2 times with synergies and net debt will be 1.8 times with synergies.
Under the agreement, SanDisk is being bought for $86.50 per share or a total equity value of about $19 billion.
If the previously announced investment in Western Digital by Unisplendour Corp. Ltd. 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. Isf the Unisplendour transaction has not closed or has been terminated, Western Digital will pay $67.50 in cash and 0.2387 shares of common stock per share of SanDisk common stock.
Additionally, if SanDisk’s cash balance falls below certain thresholds at the time of transaction close, the mix of cash and stock consideration will be adjusted.
Closing is expected in the third quarter of 2016, subject to approval by SanDisk shareholders and, in the event that the Unisplendor transaction does not close, Western Digital shareholders, receipt of regulatory approvals and other customary conditions.
Western Digital is an Irvine, Calif.-based developer and manufacturer of storage solutions that enable people to create, manage, experience and preserve digital content. SanDisk is a Milpitas, Calif.-based provider of flash storage solutions.
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