SAN JOSE, Calif.--(BUSINESS WIRE)--
Western Digital Corporation (NASDAQ: WDC) ("Western Digital" or the
"company") today announced that it has closed its previously announced
concurrent offerings of $2.3 billion aggregate principal amount of
4.750% senior notes due 2026 (the "2026 notes") and $1.0 billion
aggregate principal amount of 1.50% convertible senior notes due 2024
(the "2024 convertible notes" and, together with the 2026 notes, the
"notes"). The notes were issued by Western Digital, and guaranteed,
jointly and severally on a senior basis, by certain of Western Digital's
subsidiaries.
The net proceeds of the 2026 notes offering were approximately $2.28
billion, after deducting underwriting discounts and commissions and
other estimated offering expenses. Western Digital intends to use the
net proceeds of the offering of the 2026 notes, together with available
cash on hand, to fund its concurrent cash tender (the "tender offer") to
purchase any and all of its currently outstanding 10.500% senior
unsecured notes due 2024 (the "2024 unsecured notes"). If Western
Digital purchases less than all of the currently outstanding 2024
unsecured notes in the tender offer, the company intends to use the
remaining net proceeds of the offering of the 2026 notes to fund the
redemption of any 2024 unsecured notes that remain outstanding after the
completion of the tender offer, which is scheduled to expire at 11:59
p.m., New York City time, on Feb. 26, 2018. BofA Merrill Lynch and J.P.
Morgan acted as lead book-running managers, and Mizuho Securities, RBC
Capital Markets, Wells Fargo Securities, Citigroup, HSBC, MUFG, SMBC
Nikko, SunTrust Robinson Humphrey and TD Securities acted as
book-running managers for the 2026 notes offering. Additionally, BBVA,
BNP PARIBAS and Scotiabank acted as co-managers for the 2026 notes
offering.
The net proceeds of the 2024 convertible notes offering were
approximately $980 million, after deducting the initial purchasers'
discounts and commissions and other estimated offering expenses. The
company granted the initial purchasers a 30-day option to purchase up to
an additional $100 million aggregate principal amount of 1.50%
convertible senior notes due 2024. If the initial purchasers exercise
such option in full, the company estimates that it will receive net
proceeds from the 2024 convertible notes offering, after deducting the
initial purchasers' discounts and commissions and other estimated
offering expenses, of approximately $1.08 billion in the aggregate.
Western Digital intends to use the net proceeds of the offering of the
2024 convertible notes, together with the net proceeds from the
anticipated new Term Loan A-1 facility, which was previously announced,
and available cash on hand, to redeem all of its currently outstanding
7.375% senior secured notes due 2023, including all accrued interest,
related premiums, fees and expenses. The 2024 convertible notes will be
convertible into cash, shares of Western Digital's common stock or a
combination thereof, at Western Digital's election, at an initial
conversion price of approximately $121.91 per share (which represents a
premium of approximately 40% to the $87.08 per share closing price of
Western Digital's common stock on Jan. 30, 2018). The company may redeem
all or part of the 2024 convertible notes, at its option, on or after
Feb. 5, 2021, if the company's common stock price has been at least 130%
of the conversion price for at least 10 trading days out of a 20-day
consecutive trading period.
Starting Jan. 30, 2018, the company repurchased approximately $155
million of its common stock, at a weighted-average purchase price per
share equal to $86.87 per share with available cash on hand.
Approximately $151 million of the $155 million was used to repurchase
common stock in privately negotiated transactions concurrently with the
offering of the 2024 convertible notes, at a purchase price per share
equal to the $87.08 per share closing price of its common stock on Jan.
30, 2018.
The 2024 convertible notes were offered in a private offering to only
qualified institutional investors in accordance with Rule 144A under the
Securities Act of 1933, as amended (the "Securities Act"). The 2024
convertible notes, the common stock, if any, deliverable upon conversion
of the 2024 convertible notes and the related guarantees have not been
and will not be registered under the Securities Act or the securities
laws of any other jurisdiction. They may not be offered or sold in the
United States or to, or for the benefit of, U.S. persons absent
registration under, or an applicable exemption from, the registration
requirements of the Securities Act.
The 2026 notes were issued pursuant to an effective registration
statement (including a prospectus) (File No. 333-222762) filed with the
Securities and Exchange Commission (the "SEC"). A final prospectus for
the 2026 notes offering has also been filed with the SEC. Before you
invest, you should read the prospectus in the registration statement,
the final prospectus and other documents the company has filed with the
SEC for more complete information about the company and the offerings.
You may obtain these documents for free by visiting EDGAR on the SEC
website at www.sec.gov,
from BofA Merrill Lynch, NC1-004-03-43, 200 North College Street, 3rd
floor, Charlotte, NC 28255-0001, Attn: Prospectus Department, or by
email at dg.prospectus_requests@baml.com
or from J.P. Morgan Securities LLC via Broadridge Financial Solutions,
1155 Long Island Avenue, Edgewood, New York 11717, or by telephone at
(866) 803-9204.
This press release does not constitute an offer to sell or a
solicitation of an offer to buy the notes, common stock or any other
security, nor will there be any sale of the notes, common stock or any
other security in any state or jurisdiction in which such an offer,
solicitation or sale is not permitted. Any offer or sale will be made
only by means of a prospectus and, to the extent applicable, a free
writing prospectus which has or will be filed with the SEC.
About Western Digital
Western Digital creates environments for data to thrive. The company is
driving the innovation needed to help customers capture, preserve,
access and transform an ever-increasing diversity of data. Everywhere
data lives, from advanced data centers to mobile sensors to personal
devices, our industry-leading solutions deliver the possibilities of
data. Western Digital® data-centric solutions are marketed
under the G-Technology™, HGST, SanDisk®, Tegile™, Upthere™
and WD® brands. Financial and investor information is
available on the company's Investor Relations website.
Forward-Looking Statements
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
including statements concerning the offering of the notes and the use of
the proceeds from the offering. These forward-looking statements are
based on management's current expectations and are subject to risks and
uncertainties that could cause actual results to differ materially from
those expressed or implied in the forward-looking statements, including:
volatility in global economic conditions; uncertainties with respect to
the company's business ventures with Toshiba; business conditions and
growth in the storage ecosystem; impact of competitive products and
pricing; market acceptance and cost of commodity materials and
specialized product components; actions by competitors; unexpected
advances in competing technologies; the development and introduction of
products based on new technologies and expansion into new data storage
markets; risks associated with acquisitions, mergers and joint ventures;
difficulties or delays in manufacturing; impacts of new tax legislation;
and other risks and uncertainties listed in the company's filings with
the SEC, including the company's Form 10-Q filed with the SEC on Feb. 6,
2018, to which your attention is directed. You should not place undue
reliance on these forward-looking statements, which speak only as of the
date hereof, and the company undertakes no obligation to update these
forward-looking statements to reflect new events.
Western Digital, the Western Digital logo, G-Technology, HGST, SanDisk,
Tegile, Upthere and WD are registered trademarks or trademarks of
Western Digital Corporation or its affiliates in the U.S. and/or other
countries.
View source version on businesswire.com: http://www.businesswire.com/news/home/20180213006090/en/
Western Digital Corp.
Media Contact:
Jim Pascoe
408.717.6999
jim.pascoe@wdc.com
or
Investor
Contact:
Bob Blair
949.672.7834
robert.blair@wdc.com
Source: Western Digital Corporation
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