TDK To Acquire Hutchinson Technology

(RTTNews) - TDK Corp. (TTDKF.PK, TTDKY.PK) and Hutchinson Technology Inc. (HTCH) have entered into a definitive merger agreement for TDK to acquire all outstanding shares of common stock of Hutchinson for base consideration of $3.62 per share, plus additional consideration of up to $0.38 per share.

This depends on the level of cash less any outstanding borrowings on HTI's revolving line of credit held by Hutchinson as of the last day of the fiscal month immediately preceding the closing date.

The amount of additional consideration, if any, will equal about $0.01 per share for each $500,000 of Hutchinson's net cash over $17.5 million as of the measurement date.

As of September 27, Hutchinson 's net cash position was approximately $40 million. In addition to the satisfaction of Hutchinson 's outstanding debt, the merger values its equity at $126 million to $140 million on a fully diluted basis.

The transaction has been unanimously approved by each company's board of directors. It is currently expected to close in the first calendar quarter of 2016.

Hutchinson 's board of directors recommends that shareholders vote to approve the transaction.

For this transaction, Janes Capital Partners is acting as financial advisor to TDK and Nixon Peabody LLP is acting as TDK's legal counsel.

BofA Merrill Lynch is acting as financial advisor to Hutchinson and Faegre Baker Daniels LLP is acting as its legal counsel.