Seagate joined Toshiba Memory purchasing party for $1.25b
Seagate has confirmed it is a member of the Bain Capital-led consortium that will purchase Toshiba Corporation's memory business.
The storage giant said it is set to provide $1.25 billion in funding to the group and, as a result, expects to sign a long-term supply agreement with Toshiba Memory.
The company said it expects the deal, which is expected to close by March 2018, will be positive for its earnings.
The Bain Capital group came out as the winning bidder for Toshiba Memory last week, with Toshiba Corporation selling the business for 2 trillion yen, while maintaining a 350.5 billion yen investment in the business.
Unnamed sources told Kyodo News agency the group also consisted of SK Hynix, Apple, Dell, Kingston Technology, and Seagate.
Toshiba had suffered a $6.3 billion write-down due to rising costs at two Westinghouse nuclear projects in the US, wiping out shareholder equity and dragging the company to a full-year loss for the second year in a row.
In February, Toshiba chairman Shigenori Shiga accepted responsibility for the company's financial woes and resigned.
The company filed for bankruptcy protection in the US in March to avoid posting negative net worth for a second year that would force it to be delisted from the Tokyo Stock Exchange. The multiple postponements of Toshiba's full-year earnings report prompted an automatic demotion to the second rung of the Tokyo Stock Exchange.
More than a year ago, as part of another major restructuring effort, Toshiba sold off its PC business and let go thousands of employees.
For the previous financial year ending March 31, 2017, Toshiba posted a net loss of 965.7 billion yen, and also reported negative net worth of 552.9 billion yen.
Changes within Seagate will see Steve Luczo become executive chairman from October 1, with COO Dave Mosley promoted to the CEO position.
For its fourth quarter results announced in July, Seagate missed expectations when it reported $114 million in earnings on revenue of $2.4 billion.
Over the course of fiscal 2017, the company reported earnings of $772 million on revenue of $10.8 billion.