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Western Digital makes another enterprise push with sTec acquisition

The sTec portfolio will be used to supplement HGST’s existing solid-state storage capabilities, especially in regards to current and future projects under its partnership with Intel.
Written by Rachel King, Contributor
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Western Digital is looking to give itself a firmer footing in the enterprise solid state drive market with a new acquisition to kick off the week.

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The storage giant is buying sTec, a solid state drive maker for the enterprise circuit.

Technically, sTec will be acquired by HGST, a wholly-owned subsidiary of Western Digital.

Thus, sTec's portfolio will be used to supplement HGST’s existing solid-state storage capabilities, especially in regards to current and future projects under its partnership with Intel.

After the news broke on Monday, sTec shares were up by 3.13 points just before noon ET while Western Digital shares were slightly down by just under two points.

Western Digital has agreed to pay approximately $340 million in cash, or $6.85 per share.

With the deal expected to close during the third or fourth quarter of calendar year 2013, Wells Fargo Securities is advising Western Digital while BofA Merrill Lynch is representing sTec.

Western Digital has been concentrating more heavily on its enterprise arm over the last few weeks.

At the end of May, the Irvine, Calif.-based company introduced its new Se enterprise-class hard drive family.

Priced between $160 and $310 a pop, the hardware was designed to handle large-scale replicated environments and mid-sized network attached storage deployments.

ZDNet's David Chernicoff added that the SE drives appear to be "targeted at the less intensive datacenter workloads such as backup and as suitable media for data that is being aged out or little accessed, which does fit into many Information Lifecycle Management schemes."

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