Here's the press releases of the Maxtor purchase of Quantum HDD.
cbs.marketwatch.com
Maxtor buys hard disk drive unit
MILPITAS, Calif. (CBS.MW) - Maxtor Corp. said Wednesday it will buy Quantum Corp.'s Hard Disk Drive Group in an all-stock transaction valued at $1.3 billion.
Maxtor (MXTR: news, msgs)shares fell $2.19, or 22.4 percent, to $7.59. Quantum HDD (HDD: news, msgs) shares rose $1.56, or 17 percent, to $11.19.
Quantum, a computer hard disk drive maker, said the all-stock transaction will create the world's leading disk drive company. Quantum's HDD stockholders will receive 1.52 shares of Maxtor common stock for every share of HDD common stock they own. Based on Maxtor's stock closing price Tuesday at $9.78, the acquisition is worth about $1.3 billion.
The combined company will have a total stock market value of $2.3 billion, based on Maxtor's current market capitalization and the value of the HDD acquisition, according to a Maxtor spokeswoman.
The combined company, to be called Maxtor Corp., will be led by Mike Cannon, Maxtor's current president and chief executive officer.
The transaction, which was approved by the boards of directors of both companies, will create a company with annual sales of about $6 billion, Maxtor said.
Earnings per share are projected to become accretive in early 2002, according to the announcement. Maxtor said the merger of Quantum HDD and Maxtor will generate annualized cost savings of $120 million to $200 million within 18 months to 24 months following completion of the deal. Completion of the merger, which is expected to occur in early 2001, is subject to the approval of Maxtor and Quantum HDD stockholders and regulators.
Maxtor said it anticipates the new company will record special restructuring charges and incur other one-time expenses. The total amount of these charges and expenses is expected to total between $120 million and $180 million, Maxtor said.
"This is a bold and strategic step for both companies," Cannon said in a statement. "The combined company will have the financial resources, product breadth, and intellectual property to capitalize on the future explosive growth of storage at both the storage device and subsystem levels."
Quantum's DLT & Storage Systems Group (DSS: news, msgs), which is not involved in the Quantum HDD/Maxtor transaction, will operate as a legally separate, standalone company that will be known as Quantum Corporation and will be led by Michael A. Brown, according to Wednesday's announcement. Stockholders of Quantum DSS, which like Quantum HDD is a tracking stock of Quantum, will receive on a one-for-one basis shares of the independent company, which will include all of the operations and assets of the current Quantum DLT & Storage Systems Group.
Salomon Smith Barney is acting as financial adviser to Maxtor and Lehman Brothers Inc. is acting as financial adviser to Quantum.
yahoo.cnet.com
Maxtor shells out $2 billion for Quantum's hard-drive unit
By Joe Wilcox
Staff Writer, CNET News.com
October 4, 2000, 8:20 a.m. PT
URL: news.cnet.com
update Disk-drive maker Maxtor announced today that it will buy Quantum's hard-drive business in a deal valued at around $2 billion.
Maxtor chief executive Mike Cannon will be CEO of the combined company, which will retain the Maxtor name.
Shares in Maxtor were down nearly 22 percent in early trading on news of the deal, at $7.59, or $2.19 below the opening price.
The stock transaction, in which shareholders of Quantum's hard-drive business will receive 1.52 Maxtor shares for every Quantum HDD share, was valued at $2.3 billion based on the stocks' opening prices.
The transaction will be tax-free to both companies and their shareholders, Cannon said this morning in a conference call.
Maxtor expects to incur a one-time charge related to the merger of between $100 million and $180 million. In the long term, the company said it expects to see annual savings of between $120 million and $180 million within 18 to 24 months following the transaction's close.
The combined companies should ship 50 million hard drives annually, with annual revenue of $6 billion and market capitalization of about $2 billion, Cannon said.
The merger is contingent upon regulatory and stockholder approval |
