Stec Inc. (Nasdaq:STEC), maker of solid-state hard drives, will be bought by HGST, a wholly-owned subsidiary of Western Digital Corp. (Nasdaq:WDC) in a $340 million cash deal.
Irvine, Calif.-based Western Digital said Monday the purchase deal equates to $6.85 per share. Stec’s shares rocketed nearly 90 percent in in early Monday trading, to $6.78, after the deal was announced.
Western Digital, which primarily manufactured spinning magnetic disc hard drives, has been moving along with the industry toward more efficient solid-state memory such as the type used in removable memory sticks. This type of digital storage is currently costlier than magnetic disc storage but is already the standard in devices such as smartphones, portable music players and tablets.
The acquisition of Stec, which was an early innovator of solid state hard drives, augments HGST’s existing capabilities in the new storage technology that is quickly becoming the norm in laptops and desktops. Solid state hard drives take less time to start up, have faster transfer rates and use less energy.
“Solid state storage in the enterprise will play an increasingly strategic role in the future of Western Digital,” Steve Milligan, president and chief executive, said.