Western Digital reveals breakdown of $18.1 billion debt commitment

By Sara Rosenberg

New York, Oct. 26 – Western Digital Corp. disclosed in an 8-K filed with the Securities and Exchange Commission that its $18.1 billion debt commitment includes plans for a $1 billion revolver, $3 billion in amortizing term loans, $6 billion in other term loans and $8.1 billion in secured and unsecured bridge facilities.

The company expects to issue about $5.1 billion in secured and unsecured notes in lieu of drawing the bridge facilities at close, with the balance of the bridge facilities to be repaid with available cash, the filing said.

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.

Proceeds will be used to help fund the acquisition of SanDisk Corp. and refinance existing debt at both companies.

Other funds for the transaction will come from 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. If 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 Unisplendour 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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