Summary
Seagate Technology Holdings plc (STX) announced on September 28, 2017, a significant strategic move through an Equity Commitment Letter (ECL) to participate in the acquisition of Toshiba Memory Corporation (TMC). This filing details Seagate's commitment to invest up to JPY 139.5 billion, approximately USD 1.25 billion, in newly issued non-convertible preferred equity of K. K. Pangea, a special purpose vehicle formed for this acquisition. This investment represents a substantial financial commitment by Seagate and signals a strategic interest in the memory market. The preferred stock will accrue dividends at 5% per annum, payable in kind, with an eight-year maturity. While subordinate to the Issuer's indebtedness, it ranks senior to other preferred and common stock. Holders will have certain approval rights over significant Issuer actions. Investors should note that this is a preliminary agreement, and the consummation of the acquisition is subject to various conditions and further agreements.
Key Highlights
- 1Seagate Technology Holdings plc enters into an Equity Commitment Letter (ECL) for the acquisition of Toshiba Memory Corporation (TMC).
- 2Seagate commits to investing up to JPY 139.5 billion (approx. USD 1.25 billion) in preferred equity of K. K. Pangea, a special purpose vehicle for the acquisition.
- 3The investment is in newly issued, non-convertible preferred stock of the acquiring entity.
- 4The preferred stock will carry a 5% annual dividend, payable in kind (PIK).
- 5The preferred stock has an eight-year maturity unless redeemed earlier by the Issuer.
- 6The preferred stock ranks subordinate to the Issuer's indebtedness but senior to common stock and certain other preferred stock.
- 7Preferred stockholders, as a class, will have specific approval rights over material actions of the Issuer.