8-KMaterial AgreementsFinancial EventsExhibits & Filings

WESTERN DIGITAL CORP 8-K Report, Material Agreement (Aug 31, 2007)

Filed August 31, 2007For Securities:WDC

Summary

Western Digital Corporation (WDC) has filed an 8-K report detailing a significant financing event on August 30, 2007. The company's wholly-owned subsidiary, Western Digital Technologies, Inc. (WDTI), entered into a $1.25 billion unsecured bridge loan facility with Goldman Sachs Credit Partners L.P. and other financial institutions. This financing is primarily intended to fund the acquisition of Komag, Incorporated (Komag), through a cash tender offer and a subsequent merger. Specifically, the bridge facility will cover the cash tender offer at $32.25 per share for Komag's common stock, fund the conversion of shares in the subsequent merger, repurchase Komag's outstanding convertible notes, and pay associated fees and expenses. The facility has a maturity of 364 days from the initial borrowing and includes customary covenants and conditions for such a transaction. The company's obligations under the facility are guaranteed by Western Digital Corporation and will also be guaranteed by subsequently acquired domestic subsidiaries, including Komag post-merger.

Key Highlights

  • 1WDC subsidiary WDTI secured a $1.25 billion unsecured bridge loan facility.
  • 2The primary purpose of the facility is to finance the acquisition of Komag, Incorporated.
  • 3The acquisition will be completed through a cash tender offer at $32.25 per share, followed by a merger.
  • 4The bridge loan will also fund the repurchase of Komag's convertible notes due 2014.
  • 5The facility matures 364 days after the initial borrowing.
  • 6The loan includes leverage ratio and fixed charge coverage ratio covenants.
  • 7Western Digital Corporation and future acquired subsidiaries will guarantee the loan.

Frequently Asked Questions

The primary purpose of the $1.25 billion bridge loan is to finance Western Digital's acquisition of Komag, Incorporated. This includes funding the cash tender offer for Komag's shares, the subsequent merger, the repurchase of Komag's convertible notes, and related transaction costs.

The cash tender offer price for Komag's common stock is $32.25 per share, net to the seller in cash, without interest.

The bridge facility is scheduled to mature 364 days after the initial borrowing under the facility.

Yes, Western Digital Corporation (the parent company) guarantees the obligations of its subsidiary WDTI under the bridge facility. Additionally, certain subsequently acquired domestic subsidiaries, including Komag after the merger, will also be required to guarantee these obligations.