Western Digital Corp, Irvine, California, has signed a definitive agreement to acquire OEM board maker and chip designer Faraday Electronics Inc of Sunnyvale. Western Digital plans to issue about 1.5m shares for all shares, warrants and options of Faraday, valuing the company at about $42m. Faraday did about $18.6m in its fiscal year to March 1987, losing $1m mainly from write-offs on discontinued businesses, and Western Digital looks for it to grow rapidly in its fiscal 1988 which starts in July – business is currently running at $21m, and new orders are coming in at an annual rate of $30m. Western Digital sees the company, which inter alia makes compatible boards for firms wanting to make IBM Personalikes, as a good fit with its strategy of supplying a wide range of IBM-compatible sub-systems, saying that Faraday’s IBM chip sets and BIOS software complement Western Digital’s storage, communications and video controller business.
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