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June 25, 2013

Western Digital buys sTec for $340m to strengthen solid state business

The acquisition would increase HGST's existing solid-state storage capabilities, mainly for its current and future projects under its joint venture with Intel.

By CBR Staff Writer

Hard drive maker Western Digital’s subsidiary, HGST, has made an enterprise push with the $340m sTec acquisition, which is hoped will make HGST one of the top players in the high-growth solid-state drive (SSD) industry.

sTec is one of the oldest makers of solid state drives that are much faster compared to the conventional hard drives, but the company has lost its ground to Western Digital, Seagate Technology and Fusion-io.

Western Digital president and CEO, Steve Milligan, said that solid state storage in the enterprise will play an increasingly strategic role in the future of Western Digital.

"This acquisition is one more building block in our strategy to capitalise on the dramatic changes within the storage industry by investing in SSDs and other high-growth storage products," Milligan said.

sTec’s portfolio will be used to increase HGST’s existing solid-state storage capabilities, mainly in regards to existing and future projects under its joint venture with Intel.

sTec president and CEO, Mark Moshayedi, said that the transaction will be an important next step in proliferating many of the innovative products and technologies.

"This merger will enable our world-class engineering team and IP to continue to make a significant contribution to the high-performance enterprise SSD space that has long been sTec’s focus," Moshayedi said.

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The transaction is expected to be completed during the third or fourth quarter of 2013.

The deal for the sale of sTEC follows an insider trading scandal that forced out its co-founder and CEO in 2012.

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