Western Digital Corporation (NASDAQ: WDC) (“Western Digital” or
the “company”) today announced that it has closed its previously
announced concurrent offerings of $2.3 billion aggregate principal
amount of 4.750% senior notes due 2026 (the “2026 notes”) and $1.0
billion aggregate principal amount of 1.50% convertible senior
notes due 2024 (the “2024 convertible notes” and, together with the
2026 notes, the “notes”). The notes were issued by Western Digital,
and guaranteed, jointly and severally on a senior basis, by certain
of Western Digital’s subsidiaries.
The net proceeds of the 2026 notes offering were approximately
$2.28 billion, after deducting underwriting discounts and
commissions and other estimated offering expenses. Western Digital
intends to use the net proceeds of the offering of the 2026 notes,
together with available cash on hand, to fund its concurrent cash
tender (the “tender offer”) to purchase any and all of its
currently outstanding 10.500% senior unsecured notes due 2024 (the
“2024 unsecured notes”). If Western Digital purchases less than all
of the currently outstanding 2024 unsecured notes in the tender
offer, the company intends to use the remaining net proceeds of the
offering of the 2026 notes to fund the redemption of any 2024
unsecured notes that remain outstanding after the completion of the
tender offer, which is scheduled to expire at 11:59 p.m., New York
City time, on Feb. 26, 2018. BofA Merrill Lynch and J.P. Morgan
acted as lead book-running managers, and Mizuho Securities, RBC
Capital Markets, Wells Fargo Securities, Citigroup, HSBC, MUFG,
SMBC Nikko, SunTrust Robinson Humphrey and TD Securities acted as
book-running managers for the 2026 notes offering. Additionally,
BBVA, BNP PARIBAS and Scotiabank acted as co-managers for the 2026
notes offering.
The net proceeds of the 2024 convertible notes offering were
approximately $980 million, after deducting the initial purchasers’
discounts and commissions and other estimated offering expenses.
The company granted the initial purchasers a 30-day option to
purchase up to an additional $100 million aggregate principal
amount of 1.50% convertible senior notes due 2024. If the initial
purchasers exercise such option in full, the company estimates that
it will receive net proceeds from the 2024 convertible notes
offering, after deducting the initial purchasers’ discounts and
commissions and other estimated offering expenses, of approximately
$1.08 billion in the aggregate. Western Digital intends to use the
net proceeds of the offering of the 2024 convertible notes,
together with the net proceeds from the anticipated new Term Loan
A-1 facility, which was previously announced, and available cash on
hand, to redeem all of its currently outstanding 7.375% senior
secured notes due 2023, including all accrued interest, related
premiums, fees and expenses. The 2024 convertible notes will be
convertible into cash, shares of Western Digital’s common stock or
a combination thereof, at Western Digital’s election, at an initial
conversion price of approximately $121.91 per share (which
represents a premium of approximately 40% to the $87.08 per share
closing price of Western Digital’s common stock on Jan. 30, 2018).
The company may redeem all or part of the 2024 convertible notes,
at its option, on or after Feb. 5, 2021, if the company’s common
stock price has been at least 130% of the conversion price for at
least 10 trading days out of a 20-day consecutive trading
period.
Starting Jan. 30, 2018, the company repurchased approximately
$155 million of its common stock, at a weighted-average purchase
price per share equal to $86.87 per share with available cash on
hand. Approximately $151 million of the $155 million was used to
repurchase common stock in privately negotiated transactions
concurrently with the offering of the 2024 convertible notes, at a
purchase price per share equal to the $87.08 per share closing
price of its common stock on Jan. 30, 2018.
The 2024 convertible notes were offered in a private offering to
only qualified institutional investors in accordance with Rule 144A
under the Securities Act of 1933, as amended (the “Securities
Act”). The 2024 convertible notes, the common stock, if any,
deliverable upon conversion of the 2024 convertible notes and the
related guarantees have not been and will not be registered under
the Securities Act or the securities laws of any other
jurisdiction. They may not be offered or sold in the United States
or to, or for the benefit of, U.S. persons absent registration
under, or an applicable exemption from, the registration
requirements of the Securities Act.
The 2026 notes were issued pursuant to an effective registration
statement (including a prospectus) (File No. 333-222762) filed with
the Securities and Exchange Commission (the “SEC”). A final
prospectus for the 2026 notes offering has also been filed with the
SEC. Before you invest, you should read the prospectus in the
registration statement, the final prospectus and other documents
the company has filed with the SEC for more complete information
about the company and the offerings. You may obtain these documents
for free by visiting EDGAR on the SEC website at www.sec.gov, from
BofA Merrill Lynch, NC1-004-03-43, 200 North College Street, 3rd
floor, Charlotte, NC 28255-0001, Attn: Prospectus Department, or by
email at dg.prospectus_requests@baml.com or from J.P. Morgan
Securities LLC via Broadridge Financial Solutions, 1155 Long Island
Avenue, Edgewood, New York 11717, or by telephone at (866)
803-9204.
This press release does not constitute an offer to sell or a
solicitation of an offer to buy the notes, common stock or any
other security, nor will there be any sale of the notes, common
stock or any other security in any state or jurisdiction in which
such an offer, solicitation or sale is not permitted. Any offer or
sale will be made only by means of a prospectus and, to the extent
applicable, a free writing prospectus which has or will be filed
with the SEC.
About Western Digital
Western Digital creates environments for data to thrive. The
company is driving the innovation needed to help customers capture,
preserve, access and transform an ever-increasing diversity of
data. Everywhere data lives, from advanced data centers to mobile
sensors to personal devices, our industry-leading solutions deliver
the possibilities of data. Western Digital® data-centric solutions
are marketed under the G-Technology™, HGST, SanDisk®, Tegile™,
Upthere™ and WD® brands. Financial and investor information is
available on the company’s Investor Relations website.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, including statements concerning the offering of the notes and
the use of the proceeds from the offering. These forward-looking
statements are based on management’s current expectations and are
subject to risks and uncertainties that could cause actual results
to differ materially from those expressed or implied in the
forward-looking statements, including: volatility in global
economic conditions; uncertainties with respect to the company’s
business ventures with Toshiba; business conditions and growth in
the storage ecosystem; impact of competitive products and pricing;
market acceptance and cost of commodity materials and specialized
product components; actions by competitors; unexpected advances in
competing technologies; the development and introduction of
products based on new technologies and expansion into new data
storage markets; risks associated with acquisitions, mergers and
joint ventures; difficulties or delays in manufacturing; impacts of
new tax legislation; and other risks and uncertainties listed in
the company’s filings with the SEC, including the company’s Form
10-Q filed with the SEC on Feb. 6, 2018, to which your attention is
directed. You should not place undue reliance on these
forward-looking statements, which speak only as of the date hereof,
and the company undertakes no obligation to update these
forward-looking statements to reflect new events.
Western Digital, the Western Digital logo, G-Technology, HGST,
SanDisk, Tegile, Upthere and WD are registered trademarks or
trademarks of Western Digital Corporation or its affiliates in the
U.S. and/or other countries.
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version on businesswire.com: http://www.businesswire.com/news/home/20180213006090/en/
Western Digital Corp.Media Contact:Jim
Pascoe408.717.6999jim.pascoe@wdc.comorInvestor Contact:Bob
Blair949.672.7834robert.blair@wdc.com
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