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NEW DELHI, INDIA: Seagate Technology plc and Dot Hill Systems Corp have entered into a definitive agreement under which Seagate will commence an 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 50pc 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.
“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.”
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.