Western Digital Corporation (NASDAQ: WDC) today announced that Institutional Shareholder Services (ISS), a leading independent proxy advisory firm, has issued a report recommending that Western Digital shareholders vote to approve the issuance of Western Digital stock (the NASDAQ Stock Issuance Proposal) in the proposed acquisition of SanDisk Corporation (NASDAQ: SNDK) and all other proposals described in Western Digital's proxy statement/prospectus relating to the company's special meeting of shareholders to be held on March 15, 2016.
"We are pleased that ISS has recommended voting in favor of this compelling combination," said Steve Milligan, chief executive officer of Western Digital. "The Western Digital Board of Directors believes that the acquisition of SanDisk is the best strategic option for the company and the path that creates the most long-term value for shareholders. This combination is the next step in our ongoing strategy to transform Western Digital into a leading storage solutions company with global scale, extensive product and technology assets, and deep expertise in non-volatile memory."
In its statement to clients, ISS said: "Support FOR the proposed merger is warranted given the strategic rationale-including complementary product lines, a doubling of the addressable market, and the ability to transition Western Digital beyond its core but declining HDD business-as well as synergies of $1.1 billion, expected earnings accretion within 12 months of closing, and the ability to adjust the cash component of the merger consideration if necessary to maintain financial flexibility."
SanDisk has a strong global team and technology capability that will complement the Western Digital portfolio exceptionally well. As previously disclosed, the combined company is expected to achieve full annual run-rate synergies of $500 million within 18 months post-closing, and these synergies are expected to increase to approximately $1.1 billion by 2020.
Acquiring SanDisk is the logical next step in Western Digital's long-term strategy to achieve leadership in storage and memory, driven by product diversification and vertical integration. The transformational acquisition was the result of a multi-year strategic review. It represents the capstone in Western Digital's strategy to become a media-agnostic, vertically integrated storage solutions provider. With SanDisk, the company will have a more extensive product portfolio, double its addressable market, be a larger supplier of solid state drives - the fastest growing market segment - and have access to captive NAND supply through SanDisk's partnership with Toshiba.
Western Digital firmly believes this transaction maximizes value for both Western Digital and SanDisk shareholders. The transaction is expected to be EPS accretive on a non-GAAP basis in calendar year 2017, and the combined company's ability to generate significant cash flow will allow it to reduce debt quickly, while maintaining its strong dividend policy. Western Digital also has an experienced management team with demonstrated expertise in driving significant value creation, particularly with regard to successful integration of acquired companies.
Western Digital's board of directors unanimously recommends that Western Digital shareholders vote "FOR" the proposal to issue Western Digital common stock to acquire SanDisk, which is necessary to complete the transaction.
Western Digital's special meeting of shareholders is scheduled to take place on March 15, 2016, at 8am local time at 3333 Michelson Drive, Irvine, California. Western Digital shareholders of record at the close of business on Feb. 3, 2016 will be entitled to vote at the special meeting.
Shareholders are urged to support the SanDisk transaction by voting "FOR" the three proposals being presented to shareholders, including the share issuance proposal. Shareholders may vote by telephone, Internet or by returning a signed proxy or voting instruction form by mail. Investors with questions regarding the transaction or how to vote their shares may contact the firm's proxy solicitor, Morrow & Co, LLC at 1 (877) 849-0763.
Recommended for You
Latest News Posts
- Gearbox hiring writer for Borderlands 3
- Take-Two: Microtransactions help buffer risk of new IP
- UK official responds to lootbox petition
- Rocket League hosts Halloween event 'Haunted Hallows'
- Team Liquid wins SL i-League Invitational Season 3
- EK Fluid Gaming: Water-Cooled Gaming PC Build Guide
- Thecus® N2350 & N4350 the most affordable Home NAS series now available worldwide
- COLORFUL iGame GeForce GTX 1080 Vulcan X OC Review
- South Park: The Fractured But Hole Review
- NVIDIA locks overclocking in GeForce GTX 1070 Ti
- EK Water Blocks releases new Slim Series kits
- BIOSTAR releases new RACING Z370GT7 motherboard
- ASRock announces X299E-ITX/ac, world's first mini-ITX LGA2066 motherboard
- Noctua introduces chromax line fans, cables and heat sink covers
- G.SKILL Releases Fastest 32GB (4x8GB) Trident Z RGB Memory Kit at DDR4-4266MHz