Western Digital to launch $9.5 billion facility in March 14 week

By Sara Rosenberg

New York, March 11 – Western Digital Corp. set a bank meeting for U.S. investors on Tuesday and one in London on Wednesday to launch its $9.5 billion credit facility, according to a market source.

J.P. Morgan Securities LLC, Bank of America Merrill Lynch, Credit Suisse Securities (USA) LLC and RBC Capital Markets LLC are the leads on the debt.

The facility consists of a $1 billion five-year revolver, a $3.75 billion five-year term loan A, a $4.2 billion seven-year term loan B and a $550 million equivalent euro-denominated seven-year term loan B, the source said.

The structure differs from what was outlined in filings with the Securities and Exchange Commission, as the filings had the term loan A sized at $3 billion and the term loan B sized at $6 billion.

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

Other funds for the transaction are expected to come from Western Digital stock and from secured and unsecured notes.

Under the agreement, SanDisk is being bought for $78.80 per share for a total equity value of about $17 billion. Assuming no closing cash shortfall, Western Digital will pay $67.50 in cash and 0.2387 of a share of Western Digital common stock per share of SanDisk common stock.

Closing is expected in the second quarter, subject to approval by SanDisk shareholders and 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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