Data storage company Western Digital has raised $900 million from private equity funds Apollo Global Management and Elliott Investment Management.

The sale of convertible preferred stock comes as Western Digital looks set to try to spin off its flash business and merge it with memory chip maker Kioxia Holdings.

“This investment was the result of a comprehensive outreach and evaluation process to appropriately capitalize the company and retain optionality for future strategic decision making,” David Goeckeler, Western Digital's CEO, said.

“We have tremendous respect for Apollo and Elliott. Their partnership and perspectives as experienced capital investors will help us facilitate the next stages of Western Digital’s strategic review. We look forward to working together in advancing our goal of creating value and finalizing the best possible strategic outcome for our shareholders.”

Activist investors Elliott last year called on Western Digital to split the flash business it ran after acquiring SanDisk for $19bn in 2015.

Elliott managing partner Jesse Cohn and senior portfolio manager Jason Genrich said in a joint statement: “We are pleased to participate in this investment and are encouraged by the progress Western Digital has made in its strategic review process to date."

"Our participation follows our previous offer to provide strategic resources and additional capital to help the company realize the full value of both its HDD and Flash businesses."

As part of the investment, Apollo's Reed Rayman was added to the company's board.