Dot Hill’s Portfolio Will Complement and Expand
Seagate’s Storage Systems Offerings
Seagate Technology plc (NASDAQ:STX), a world leader in storage
solutions, and Dot Hill Systems Corp. (NASDAQ: HILL), a trusted
supplier of innovative software and hardware storage systems, today
announced that they have entered into a definitive agreement under
which a wholly-owned indirect subsidiary of Seagate will commence a
tender offer for all of the outstanding shares of Dot Hill in an
all-cash transaction valued at $9.75 per share, or a total of
approximately $694 million on a fully-diluted equity value basis.
As Dot Hill has approximately $49 million in cash on its balance
sheet as of June 30, 2015, the transaction reflects an enterprise
value of approximately $645 million. The consideration represents a
50% premium over the preceding three month stock price average.
Dot Hill’s external storage array-based systems and software
products will complement and expand Seagate’s storage systems
offerings and be offered as part of Seagate’s Cloud Systems and
Electronics Solutions business. Seagate will leverage Dot Hill’s
storage technology IP portfolio and software capabilities to drive
innovation and provide incremental value to their combined OEM
customer base.
“Dot Hill’s innovative storage systems and IP portfolio are a
strategic addition to our storage technology portfolio, enabling us
to accelerate the growth of Seagate’s OEM-focused cloud storage
system and solutions business,” said Phil Brace, President of Cloud
Systems and Electronics Solutions at Seagate. “We are focused on
providing the highest quality storage systems for our OEM customers
and Dot Hill’s storage solutions will enable us to advance our
strategic efforts. We look forward to welcoming Dot Hill’s strong
team, which has proven experience in developing and delivering
best-in-class storage solutions that are trusted by the world’s
leading IT manufacturers and their channel partners, and we expect
the transaction to be accretive to non-GAAP earnings in fiscal
2016.”
“Seagate has a strong reputation in enterprise storage and is
focused on building out its best-in-class storage system
capabilities, making them the right home for the talented Dot Hill
team,” said Dana Kammersgard, Chief Executive Officer of Dot Hill.
“Dot Hill’s customers will benefit from leveraging Seagate’s
leading technology and infrastructure to accelerate the delivery of
advanced solutions.”
The transaction has been unanimously approved by Dot Hill’s
Board of Directors and the consummation of the tender offer is
subject to customary closing conditions, including a minimum tender
of a majority of outstanding Dot Hill shares, the expiration or
termination of any applicable waiting periods under applicable
competition laws, and other customary conditions. Following the
successful completion of the tender offer, Seagate will acquire all
remaining shares not tendered in the tender offer through a
second-step merger at the same price as to be paid to stockholders
tendering their shares in the tender offer. The transaction is
currently expected to close during the fourth calendar quarter of
2015, subject to the satisfaction of customary closing conditions
and the receipt of certain regulatory approvals, including those
required by the Hart-Scott-Rodino Antitrust Improvements Act.
Seagate expects to finance the transaction from existing cash
balances and the transaction is not subject to any financing
conditions.
Perella Weinberg Partners served as financial advisor and Wilson
Sonsini Goodrich & Rosati served as primary legal advisor to
Seagate in connection with the transaction. Morgan Stanley &
Co. LLC and Needham & Company, LLC served as financial advisors
and Cooley LLP served as legal advisor to Dot Hill.
About Seagate Technology
Seagate creates space for the human experience by innovating how
data is stored, shared and used.
About Dot Hill Systems
Leveraging its proprietary AssuredSAN family of hybrid storage
solutions with RealStor, the next generation real-time storage
operating system, Dot Hill solves today's storage workload
challenges created by the Internet of Things and third platform
technologies. In today's interconnected world, Dot Hill storage
solutions support people accessing information, and machines
collecting sensor data, all in real time. Dot Hill's solutions
combine innovative intelligent software with the industry's most
flexible and extensive hardware platform and simplified management
to deliver best-in-class solutions. Headquartered in Longmont,
Colo., Dot Hill has offices and/or representatives in the United
States, Europe, and Asia. For more information, contact Dot Hill at
http://www.dothill.com/ or @Dot_Hill.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. These forward-looking statements are based on information
available to Seagate as of the date of this press release. Current
expectations, forecasts and assumptions involve a number of risks,
uncertainties, and other factors that could cause actual results to
differ materially from those anticipated by these forward-looking
statements. Such risks, uncertainties, and other factors may be
beyond Seagate’s control. In particular, such statements include
anticipated benefits of the Dot Hill acquisition and Seagate’s
expectation that the Dot Hill acquisition will be accretive to
non-GAAP earnings. The following factors, among others, could cause
actual results to vary from the forward-looking statements: the
ability of the parties to satisfy the conditions precedent and
consummate the proposed merger, the timing of consummation of the
proposed merger, the ability of the parties to secure any required
shareholder approvals in a timely manner or on the terms desired or
anticipated, the ability to achieve anticipated benefits and
savings, risks related to disruption of management’s attention due
to the pending merger, operating results and businesses generally,
the outcome of any legal proceedings related to the proposed merger
and the general risk associated with the respective businesses of
Seagate and Dot Hill, including the general volatility of the
capital markets, terms and deployment of capital, volatility of
Seagate and Dot Hill share prices, changes in the data storage
industry, interest rates or the general economy, underperformance
of Seagate’s and Dot Hill’s assets and investments and decreased
ability to raise funds and the degree and nature of Seagate’s and
Dot Hill’s competition. Additional information concerning risks,
uncertainties and other factors that could cause results to differ
materially from those projected in the forward-looking statements
is contained in Seagate’s Report on Form 10-K filed with the U.S.
Securities and Exchange Commission on August 12, 2015, the “Risk
Factors” section of which is incorporated into this document by
reference and other documents filed with or furnished to the
Securities and Exchange Commission. These forward-looking
statements should not be relied upon as representing Seagate’s
views as of any subsequent date and Seagate undertakes no
obligation to update forward-looking statements to reflect events
or circumstances after the date they were made.
About the Tender Offer
THE PRESS RELEASE IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT
AN OFFER TO BUY OR THE SOLICITATION OF AN OFFER TO SELL ANY SHARES
OF DOT HILL COMMON STOCK. THE TENDER OFFER DESCRIBED IN THIS
DOCUMENT HAS NOT YET COMMENCED.
At the time the offer is commenced, a wholly-owned indirect
subsidiary of Seagate will file a Tender Offer Statement on
Schedule TO with the United States Securities and Exchange
Commission (“SEC”), and Dot Hill will file a
Solicitation/Recommendation Statement on Schedule 14D-9 with
respect to the tender offer.
The Offer to Purchase, the related Letter of Transmittal and
certain other offer documents, as well as the
Solicitation/Recommendation Statement, will be made available to
all stockholders of Dot Hill at no expense to them. The Tender
Offer Statement and the Solicitation/Recommendation Statement will
be available without charge at the SEC’s web site, at
http://www.sec.gov. Free copies of these materials and certain
other offering documents will be sent to Dot Hill’s stockholders by
the information agent for the offer.
DOT HILL STOCKHOLDERS AND OTHER INVESTORS ARE URGED TO READ THE
TENDER OFFER MATERIALS (INCLUDING THE OFFER TO PURCHASE, RELATED
LETTER OF TRANSMITTAL AND CERTAIN OTHER OFFER DOCUMENTS) AND THE
SOLICITATION/RECOMMENDATION STATEMENT, INCLUDING ALL AMENDMENTS TO
THOSE MATERIALS. SUCH DOCUMENTS WILL CONTAIN IMPORTANT INFORMATION,
WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE TENDER OFFER.
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version on businesswire.com: http://www.businesswire.com/news/home/20150818006615/en/
SeagateMedia Relations Contact:Michael Busselen,
408-658-1887michael.busselen@seagate.comorDot HillHanif Jamal,
303-845-3377SVP and CFOhanif.jamal@dothill.com
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