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Western Digital Corporation (WDC)

  • Mon, Apr. 6, 12:43 PM
    • Following the 20%+ plunge seen in response to the company's Q1/2015 warning, SanDisk (NASDAQ:SNDK) is trading 40% below its replacement value (as measured in terms of fabs, royalty revenue, and cash), estimates Bernstein's Mark Newman. That, in turn, leads him to call the NAND flash giant a compelling buyout target.
    • Newman adds there's "growing unrest" among SanDisk investors over its current valuation, and considers the company an "obvious" target for activists. His list of potential suitors includes NAND rivals Micron and SK Hynix, and hard drive giants Seagate and Western Digital.
    • Of note: Antitrust regulators would closely vet a Micron or Hynix acquisition, given the potential pricing impact of further NAND consolidation. And Seagate recently formed a NAND alliance with Micron.
    • Susquehanna also argues today SanDisk makes for a good buyout target, but focuses specifically on Western Digital (WDC +0.1%). The firm argues an acquisition of SanDisk by Western, which has already made a string of flash-related purchases (all enterprise-related) to protect its flank as SSDs continue encroaching on hard drives, would be accretive for Western in year 2 even at a 35% premium.
    | Mon, Apr. 6, 12:43 PM | Comment!
  • Tue, Mar. 3, 11:12 AM
    • Western Digital's (WDC -2.5%) HGST unit (formerly Hitachi's hard drive division) is acquiring Amplidata, a provider of software for managing object storage deployments within data centers. Terms are undisclosed.
    • Amplidata argues its software, which is sold to enterprises, service providers, and OEMs, offers unmatched data reliability and durability, and can scale infinitely as more nodes are added. Demand for object storage solutions has been outpacing broader storage growth, as enterprises increasingly rely on them to handle unstructured data (documents, e-mails, videos, etc.).
    • HGST already relies on Amplidata's software to help power its Active Archive storage systems, and says the deal "supports the company's strategy to expand into higher value data storage platforms and systems." It follows HGST's December acquisition of flash storage array vendor Skyera.
    • Of note: Though having a sizable Silicon Valley presence, Amplidata is incorporated in Belgium. Thus, Western is likely using offshore cash to pay for the acquisition.
    | Tue, Mar. 3, 11:12 AM | Comment!
  • Dec. 15, 2014, 11:38 AM
    • Western Digital's (WDC -0.4%) HGST division (formerly Hitachi's hard drive unit) has completed an all-cash purchase of Skyera, a maker of high-density flash storage arrays for enterprises and cloud service providers implementing scale-out data center architectures (quite popular among cloud firms).
    • Terms are undisclosed. The Register's Chris Mellor suspects Western paid $400M or more for Skyera, which has raised $90M-$100M in funding over three rounds.
    • Skyera's systems have won praise both for their high densities - the current-gen skyHawk FS can support 136TB of storage in a modest 1U form factor, and the next-gen skyEagle will support 500TB - and their ability to offer flash endurance levels with standard MLC NAND chips that typically require costlier eMLC chips. The startup has also developed a proprietary OS (known as SeOS) for its hardware.
    • Western, like Seagate, has been responding to flash's ongoing share gains against hard drives by growing its flash exposure. Last year, the company bought PCI-e flash module vendor Virident, SSD vendor sTec, and SSD caching software startup VeloBit.
    | Dec. 15, 2014, 11:38 AM | 1 Comment
  • Dec. 9, 2014, 10:55 AM
    • Western Digital (WDC +0.6%) says it has "successfully resolved two non-compliance matters with China's Ministry of Commerce" related to the regulator's requirement it keep what was once Hitachi's hard drive ops separate from Western's home-grown hard drive ops.
    • The ministry has indicated to Western it is "now fully focused on considering Western Digital's application to lift the restriction," which was placed in 2012 as a condition for approving Western's purchase of the Hitachi unit.
    • Shares are up slightly, and making new highs in the process. The Nasdaq is down 1%.
    | Dec. 9, 2014, 10:55 AM | Comment!
  • Dec. 23, 2013, 6:48 PM
    • With Xyratex's storage subsystem business both a supplier and a rival to the storage OEMs who account for a large chunk of Seagate's (STX) enterprise hard drive sales, analysts note Seagate's pending acquisition of Xyratex brings both cross-selling opportunities and channel conflict risks.
    • BMO suspects Seagate hopes to use Xyratex (presumably via its ClusterStor line) to directly supply Web/cloud providers, but also notes Seagate "will now compete against a set of customers." The Register's Chris Mellor: "Western Digital (WDC) and Toshiba ... should pick up some extra [hard drive] business from OEMs displeased by Seagate competing with its own channel."
    • Piper, however, likes how Xyratex's hard drive equipment unit could lower Seagate's hard drive testing times and capex. It also observes Xyratex claims IBM, H-P, NetApp, and Dell as clients, even if it competes with them to an extent.
    • Wells Fargo likes the deal, but also thinks Seagate may still need to make some flash storage acquisitions. Western Digital has been more aggressive here, snapping up server flash module vendor Virident and module/SSD supplier sTec.
    • Deutsche, meanwhile, expects Teradyne's (TER) hard drive test equipment sales to get a boost as Western Digital and Toshiba stop buying test equipment from Xyratex.
    | Dec. 23, 2013, 6:48 PM | Comment!
  • Dec. 23, 2013, 9:25 AM
    • Seagate (STX) is acquiring hard drive equipment/storage subsystem maker Xyratex (XRTX) for $13.25/share, or $294M if excluding $80M in cash on hand. The price represents a 27% premium to Xyratex's Friday close. (PR)
    • By acquiring Xyratex, which has counted Seagate, Western Digital (WDC), and Toshiba among its clients (the latter two might now now turn to other suppliers), Seagate is vertically integrating in an effort to gain a manufacturing edge. The purchase comes shortly after Western beat Seagate to the punch in shipping helium drives (they're lighter, denser, and more power-efficient than conventional drives), a technology long promoted by Xyratex.
    • The deal also increases Seagate's enterprise storage exposure. As SA Pro contributor Kingsley Park Capital has noted, Xyratex, historically focused on relatively low-end solutions, recently launched ClusterStor, a solution aimed at the growing, higher-margin HPC storage market.
    • Seagate expects the purchase to contribute $500M-$600M to FY15 (ends June '15) revenue, and to be neutral to FY15 EPS. The deal is expected to close by mid-2014. Activist investor Baker Street Capital, which has a large stake in Xyratex, backs the deal.
    | Dec. 23, 2013, 9:25 AM | 7 Comments
  • Sep. 9, 2013, 10:26 AM
    • Virident, like Fusion-io (FIO +11.3%), offers PCI-Express-based server flash memory modules meant for performance-intensive applications. And beaten-down Fusion-io has been the subject of plenty of M&A speculation over the last two years.
    • Virident asserts its FlashMAX II PCI-Express modules offer 2x the performance of rival solutions.The company also provides FlashMAX Connect, an innovative software solution for allowing FlashMAX II modules to be clustered, to mirror/replicate content, and to act as caches for 3rd-party storage.
    • Western Digital (WDC -0.5%) should be able to greatly expand Virident's distribution. The purchase comes less than 3 months after WDC announced it's buying enterprise SSD vendor sTec for $207M.
    • In addition to Fusion-io, Virident competes against EMC, which offers its XtremSF flash modules and other flash storage products, and private flash storage system vendors such as Nimble Storage and Violin Memory.
    • Interestingly, Western Digital archrival Seagate (STX -0.8%) recently invested $40M in Virident and struck a reseller deal with the company. Though Seagate is probably getting a good return on its investment, it can't be happy to see Virident fall into WDC's arms. Will it counter by making a play for Fusion-io?
    • Previous: Western Digital buying Virident for $685M
    | Sep. 9, 2013, 10:26 AM | Comment!
  • Sep. 9, 2013, 8:29 AM
    • Western Digital (WDC +0.6%) unit HGST has agreed to acquire Virident Systems, a provider of server-side flash storage products, in a deal worth $685M.
    • The enterprise value of the transaction is $645M, net of Virident's estimated cash balance at closing.
    • The acquisition extends HGST's presence in the market for corporate solid-state drives (SSD), which IDC forecasts will grow to $7B by 2017 from $2.5B in 2012.
    • The deal is expected to close in Q4. (PR)
    | Sep. 9, 2013, 8:29 AM | Comment!
  • Jul. 10, 2013, 10:15 AM
    Western Digital (WDC +0.6%) follows up on the sTec purchase by acquiring VeloBit, a developer of server-based SSD caching software that improves I/O performance for databases and enterprise applications. VeloBit's software, which has received good reviews, will be integrated with WDC's SSDs, presumably including sTec's. Deal terms are undisclosed.
    | Jul. 10, 2013, 10:15 AM | Comment!
  • Jun. 24, 2013, 2:39 PM
    Western Digital's (WDC -2%) acquisition of sTec is a "smart move," says Lazard's Edward Parker: he notes sTec's SSDs offer best-in-class endurance, which should go over well with WDC's OEM and enterprise clients, and that WDC is only paying 1.5x 2013 sales, a multiple well below that seen in peer acquisitions. RBC, however, points out sTec has been plagued by management/execution issues (a big reason for the price tag), and JPMorgan sees the deal as evidence of the long-term threat SSDs pose to hard drive sales. Will Seagate (STX -2%), which has been busy expanding its consumer and enterprise SSD lineups, respond with a purchase of its own?
    | Jun. 24, 2013, 2:39 PM | Comment!
  • Jun. 24, 2013, 8:06 AM
    Western Digital (WDC) buys STEC (STEC) for $6.85 per share in a deal with an enterprise value of close to $207M. The deal to acquire the solid-state drive maker is expected to close in Q4.
    | Jun. 24, 2013, 8:06 AM | Comment!
  • Jan. 22, 2013, 10:15 AM
    Western Digital (WDC +4%) trades higher after announcing it recently bought Arkeia, a provider of storage backup software and VMware backup appliances for SMBs. The purchase expands WDC's enterprise lineup - the company already offers NAS servers  for SMBs - and (as The Register observes) puts it in competition with Seagate's (STX +1.4%) EVault backup/recovery product line. It also helps WDC lower its PC dependence a bit at a time when doing so seems a good idea.
    | Jan. 22, 2013, 10:15 AM | 1 Comment
  • Mar. 6, 2012, 6:55 PM
    Western Digital (WDC) and Hitachi (HIT) announce that they've obtained all required regulatory approvals for WD's acquisition of Viviti Technologies, and expect the acquisition to close on March 8. WDC +0.6%, HIT -1.7% AH.
    | Mar. 6, 2012, 6:55 PM | Comment!
  • Dec. 27, 2011, 8:48 AM
    The Chinese government asserts Western Digital's (WDC) planned purchase of Hitachi's (HIT) hard drive division will "exert a negative impact on Chinese consumers," and says it will seek "appropriate solutions" to deal with the issue. Chinese regulators already drove a hard bargain with Seagate (STX) over its purchase of Samsung's hard drive unit. (EU approval)
    | Dec. 27, 2011, 8:48 AM | 1 Comment
  • Nov. 23, 2011, 9:27 AM
    Western Digital (WDC) gains 0.8% after its acquisition of Hitachi's (HIT) hard drive business is given a green light by EU regulators. In return for the go-ahead, Western Digital has agreed to sell a hard drive manufacturing plant and other "essential production assets." Archrival Seagate's (STX) purchase of Samsung's hard drive division was cleared in October. (yesterday)
    | Nov. 23, 2011, 9:27 AM | 1 Comment
  • Oct. 4, 2011, 10:54 AM
    Western Digital (WDC) has offered concessions to the EU with the goal of obtaining approval for its $4.3B acquisition of Hitachi's hard drive business. The EU is worried about the potential of the deal, along with Seagate's (STX) proposed acquisition of Samsung's hard drive unit, to consolidate market power in the hands of two industry giants.
    | Oct. 4, 2011, 10:54 AM | Comment!
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Company Description
Western Digital Corp is a developer, manufacturer and provider of data storage solutions that enable consumers, businesses, governments & other organizations to create, manage, experience & preserve digital content. Its products include HDDs and SSDs.
Sector: Technology
Country: United States