US-headquartered storage solutions provider Seagate Technology today said it will acquire Dot Hill Systems for United States dollars 694 million (around Rs 4,525 crore).
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How the proposed acquisition will affect employees has yet to be addressed by either company.
In a joint statement, the firms said “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 Dollars 9.75 per share, or a total of approximately USD 694 million”.
Seagate said the transaction should conclude by Q4 of 2015.
The per share price is an 88 percent premium to where Dot Hill’s stock closed Tuesday, at $5.18.
Dot Hill had $49 million in cash on the balance sheet as of June 30, putting the Colorado-based company at a value of roughly $645 million, according to the announcement.
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.
Neither Seagate nor Dot Hill responded to enquiries for more information by publication time.
The deal is expected to close in the fourth calendar quarter of 2015 and add to Seagate’s fiscal 2016 earnings excluding items.
Seagate expects to finance the transaction from existing cash balances and the transaction is not subject to any financing conditions.
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Seagate employed the services of Perella Weinberg Partners as financial advisor, and Wilson Sonsini Goodrich & Rosati as its legal advisors for the deal. Morgan Stanley and Needham & Company are working as financial advisors for Dot Hill with Cooley LLP signed for legal.
