WDC - SNDK Merger
Hi all,
I'm trying to reconcile and make sense of the announced deal consideration structure for SNDK.
From reading the SEC filings, the deal consideration is $18.9 bn. However in the presentation Western Digital's Acquisition of SanDisk, dated 21 October 2015, the sources of financing are listed as follows:
•$17.4 bn in debt
•$6.8 bn in cash
•$0.9 bn in equity consideration
This totals $25.1bn however, or $6.2 bn more than the deal price - I do not understand this? Could anyone clarify? Also I believe the $6.8 bn includes the $3.775 bn to be invested by Unisplendour
Also, not sure how the $0.9bn in equity consideration is arrived at? If unisplendour investment closes, I make it that WDC would issue approx. 3.8m new shares @ 79.5957 = approx. $306m in equity consideration? What am I missing here?
Also, trying to figure out what the balance sheet of the merged entity will look like? Taking WDC's balance sheet per latest filing (per 10-q for quarter ending 2 Oct 2015), with debt of c. $2.536 bn (LT debt + ST debt + revolver ), adding $17.4 bn in acquisition debt plus a further $1 bn in new revolver would give post-merger total debt of $20.936 bn.
Offsetting this is cash per the last 10-Q of $5.874 bn (cash plus available for sale securities disclosed of c. $703 m), plus the pending Unisplendour cash of $3.775bn giving total cash of $9.559 bn. Unless some of this cash is used for the SNDK consideration, which I'm unclear on.
Finally, that happens to SNDK's existing debt (which is all convertible I believe) and cash as part of the deal? Is the $18.9bn the equity value or EV of SNDK??
Really just trying to figure out the sources and uses of the transaction to understand what the post-acquisition balance sheet will look like - would REALLY appreciate anyone's thoughts / help on this
Thanks in advance
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