Toshiba sells to Bain-led group

K.K. Pangea (Pangea), a special purpose acquisition company formed and controlled by a Bain Capital Private Equity will fund the acquisition of TMC directly or indirectly from: Toshiba JPY 350.5 billion (re-investment, EUR 2.6 billion); Bain Capital JPY 212 billion (EUR 1.6 billion); Hoya Corporation (Hoya) JPY 27 billion (EUR 204 million); SK hynix, JPY 395 billion (EUR 3 billion); US investors JPY 415.5 billion (EUR 3.1 billion). In addition, Pangea intends to secure loans in the amount of approximately JPY 600 billion (EUR 4.5 billion) from financial institutions and banks. US investors are comprised of Apple Inc., Kingston Technology Corporation, Seagate Technology plc, and Dell Technologies Capital. With Toshiba and Hoya’s investments, Japan-based companies will hold more than 50 percent of the common stock in Pangea, and going forward Japan-based companies will continue to hold a majority. After the TMC shares are transferred to Pangea, Bain Capital and TMC management will lead TMC’s business operations to secure continuous growth. The US investors will not acquire any common stock or voting rights over TMC. In addition, SK hynix will be firewalled from accessing TMC proprietary information and will not permitted to own more than 15 percent of the voting rights in Pangea or TMC for a period of 10 years as provided by the terms of the agreement. Innovation Network Corporation of Japan (INCJ) and Development Bank of Japan Inc. (DBJ), which operate as neutral, independent organizations dedicated to promoting industrial competitiveness, have also expressed their interest in investing in Pangea or TMC at a later time, subject to satisfaction of certain conditions. Western Digital Corporation (Western Digital) has sought to prevent a transfer of Toshiba’s interests in certain Joint Ventures between Toshiba and SanDisk LLC (SanDisk), a subsidiary of Western Digital, to any third party. Toshiba and SanDisk are currently engaged in litigation and arbitration. Upon satisfaction of all conditions, the closing of the share transfer will be on the first business day of the month immediately following the month in which the conditions are satisfied or waived. If such conditions are not satisfied or waived at least 11 business days prior to the first business day of such month, then the closing shall take place on the first business day of the following month. If the conditions are satisfied or waived during the period starting on February 15, 2018 and ending on the end of March 23, 2018, the closing shall occur on March 30, 2018.