Circle July 14 on the calendar.
That’s when the Chamber of Commerce International Court of Arbitration in San Francisco will hear arguments by San Jose-based Western Digital Corp. contending Toshiba Corp. violated terms of their joint venture in agreeing to sell its flash memory business to a consortium led by SK Hynix Inc. in South Korea and the Japanese operation of Bain Capital, with funding from state-run Innovation Network Corp. of Japan and Development Bank of Japan Inc.
Toshiba has dismissed those claims and filed a lawsuit against Western Digital last week, seeking a permanent injunction and $1.1 billion in damages for interfering with the sale.
The developments could hold long-term ramifications for OC, where Western Digital and Toshiba operate major hubs. Toshiba entered the year as the third biggest foreign-owned company, with 1,745 local employees. Western Digital, which recently moved its headquarters from Irvine to Silicon Valley, entered the year with an estimated 1,700 local employees, putting it at No. 50 on the Business Journal’s annual list of the largest employers here.
The sale of Toshiba’s flash memory business is projected to come in above its $18 billion asking price and save the conglomerate from financial ruin fueled by its bankrupt U.S. nuclear business. The price tag is far more than Western Digital is willing to pay to acquire the unit, which has triggered a global battle to unwind the transfer of assets.
The companies have been strategic partners for more than a decade. A majority of Western Digital’s NAND-flash memory is primarily supplied through its business ventures with Toshiba, according to its annual report. It’s the most popular rewritable memory chip used in USB drives, cameras, iPods, smartphones, tablets and other devices.
Toshiba’s global tumult has already spilled into OC, where the tech giant sold its 26-acre campus at 9740 Irvine Blvd. in the Irvine Spectrum in December. The Business Journal in May reported that the company will shutter its U.S. commercial phone service division based in Irvine in its second local business closure in about a year. Toshiba America Information Systems Inc.’s Telecommunication Systems Division employs about 150, putting it at No. 8 among the largest telecom employers here.
The cuts amount to about 8.5% of Toshiba’s OC operation. A year ago, we reported that Toshiba’s U.S. electronics unit, also headquartered in Irvine, exited the consumer PC market in a major strategic shift that underscored the changing habits of end users and the lingering challenges facing legacy manufacturers in Japan and elsewhere.
The move followed big job cuts at Toshiba America Information Systems, which shed 200 workers a few months earlier, or roughly 20% of its workforce. The unit primarily handles marketing and sales operations in the U.S. for Toshiba’s largest local unit, with annual sales of about $3 billion.
IoT Firm Sold
A Las Vegas holding company has acquired Newport Beach-based Saddle Ranch Media Inc. and retained an Irvine investment firm to navigate regulatory issues and listing compliance in public markets.
Financial terms of SRMX/SkyFidelity Inc.’s purchase were undisclosed.
The combined entity will take the name SkyFidelity Inc. with ticker symbol SKYX on the Over-the-Counter penny exchange.
Saddle subsidiary Tri Cascade Inc., which is developing Internet of Things applications and products to reduce energy costs, has retained Irvine-based Boustead Securities LLC to access capital markets as it develops hardware and software manufacturing.
Boustead advises clients on initial public offerings, mergers and acquisitions, capital raises, and restructuring. It played a key role in the recent IPO of Newport Beach-based manufacturer ADOMANI Inc., which became the first equity crowdfunded company to list on the NASDAQ.
Boustead was the underwriter, and its Santa Monica sister company, FlashFunders Inc., issued securities through the sale of more than 2.5 million shares on its website.
