Western Digital®  Corporation (NASDAQ: WDC) and sTec, Inc. (NASDAQ: STEC) announced today that  they have entered into a definitive merger agreement under which sTec, Inc., an  early innovator in enterprise solid-state drives (SSDs), will be acquired by  HGST, a wholly-owned subsidiary of Western Digital. sTec will be acquired for  approximately $340 million in cash, which equates to $6.85 per share. This  represents approximately $207 million in enterprise value, net of sTec’s cash as of March 31, 2013. 

The pending acquisition augments HGST’s  existing solid-state storage capabilities, accelerating its ability to expand  its participation in the rapidly growing area of enterprise SSDs. HGST remains  committed to its highly successful joint development program with Intel®  Corp. and will continue to deliver current and future SAS-based SSD products  with Intel.

sTec has strong engineering talent and  intellectual property that will complement HGST technical expertise and  capabilities. HGST will continue to support existing sTec® products  and collaborate with its customers to understand their future requirements.

“Solid state storage in the enterprise  will play an increasingly strategic role in the future of Western Digital,”  said Steve Milligan, president and chief executive officer, Western Digital  Corporation. “This acquisition is one more building block in our strategy to 
capitalize on the dramatic changes within the storage industry by investing in  SSDs and other high-growth storage products.”

“This acquisition demonstrates HGST’s ongoing  commitment to the rapidly growing enterprise SSD segment, where we already have  a successful product line,” said Mike Cordano, president, HGST. “We are excited  to welcome such a talented team of professionals to HGST, where their inventive  spirit will be embraced and encouraged.”

“At this key point in the evolution of  the storage industry, sTec is excited to consummate this transaction. It will  be an important next step in proliferating many of the innovative products and  technologies that sTec has been known for throughout its 23-year history and 
provides immediate value for our shareholders and a strong future for our  employees and customers,” said Mark Moshayedi, president  and chief executive officer, sTec. “This merger will enable our world-class  engineering team and IP to continue to make a significant contribution to the  high-performance enterprise SSD space that has long been sTec’s focus.”

The board of directors of sTec, on the  unanimous recommendation of a special committee of independent directors of the  board, has unanimously approved the merger agreement and has resolved to  recommend that sTec shareholders approve the transaction at a sTec shareholders meeting to be held to approve the merger agreement and the merger. The directors and executive officers of sTec have entered into separate voting  agreements under which they have agreed, subject to certain exceptions, to vote  their respective shares in favor of the proposed transaction. 

Wells Fargo Securities, LLC has acted as  the financial advisor to Western Digital and BofA Merrill Lynch has acted as the  financial advisor to sTec in connection with this transaction.

Closing of the acquisition, which is subject  to customary conditions, is expected to occur in the third or fourth calendar  quarter of 2013.