“Seagate Buyout” | Case Study Analysis | 1. Why is Seagate undertaking this transaction? Is it necessary to divest the VERITAS shares in a separate transaction? Do the shareholders of VERITAS gain or lose from this transaction? Under the original organizational structure‚ Seagate’s management believed its current stock price is undervalued by the current market and thus not delivering the value to shareholders of Seagate stock. At this time‚ Seagate also held a significant stake in VERITAS
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Seagate Technologies operates in a highly competitive‚ price-sensitive‚ and growing industry for disk drives. Competitors include a number of direct‚ indirect‚ foreign‚ and domestic competitors including‚ but not limited to Quantum‚ Western Digital‚ IBM‚ Toshiba‚ and NEC. To compete‚ Seagate’s maintains low prices and introduces new cost-effective products that are equal to or better than the competition. To support such a strategy‚ Seagate invests heavily in R&D‚ maintains strong supplier
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Finance 448 Pulvino Seagate Technology Buyout Suggested Assignment Questions 1. Why is Seagate undertaking these transactions (the buyout and the stock swap with Veritas)? Who are the winners and losers resulting from these transactions (e.g.‚ Seagate shareholders‚ Seagate management‚ Veritas shareholders‚ Silver Lake Partners)? 2. Who benefits from generic leveraged buyouts? Who loses? Is the rigid disk drive industry conducive to a leveraged buyout? NOTE: For the purposes of questions
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Seagate Technology Buyout 1. We can examine the stock prices of Seagate and Veritas on Exhibits 3 and 5. Exhibit 3 shows us that Seagate had a stock price of 64.25$/share on March 10th 2000. Veritas stock price is disclosed on Exhibit 5 with 168.69$/share at that date‚ which is an increase in value of more than 200% within the last six months (Exchibit4). Moreover‚ we can assert that the pre-tax value of Veritas stake‚ which is held by Seagate‚ has notably exceeded Seagate’s market capitalization
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“LA ADQUISICIÓN DE SEAGATE TECHNOLOGY” 1. Why is Seagate undertaking this transaction? Is this necessary to divest the Veritas shares in separate transaction? Porque el mercado estaba menospreciando el valor de sus acciones‚ esto ya que aun cuando Seagate Technology poseía gran parte de VERITAS (155 millones de acciones) sólo aumento en un 25% el valor de sus acciones que es nada si se compara con el 200% que aumentó el de las de VERITAS. En sí no es necesario‚ pero al hacer
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Seagate Technology Buyout Hard disk drives make up the largest sector of the information storage industry in 1999. The hard disk drive market can be classified into three separate categories‚ desktop‚ enterprise‚ and mobile. The mobile and desktop markets are expected to converge in the long run. While the desktop market represents approximately 58% of the $25 billion total hard disk drive market‚ enterprise margins were nearly double the margins in the desktop sector (10-15%). Since 1997‚ the number
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Seagate Technology Buyout March 22‚ 2006 By: Rachel Cluck Beth Crocker Heather Preston Jessica Seal Table of Contents Introduction............................................................................3 Objectives ..............................................................................3 Overview................................................................................4 Alternatives – How to Address Seagate’s Low Stock Price ..5 Do Nothing........................
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Seagate Buyout Case Group 5 Heng Qiao Eduardo Pereira Wei Wang Yanan Pei Introduction of the companies Seagate Technology‚ Inc. is one of the world’s largest manufacturers of computer disk drives and related data storage devices with approximately $6.5 billion in annual revenues. In early November 1999‚ Luczo‚ president and CEO of Seagate considered a restructuring proposal with Silver Lake‚ a successful private equity firm that is specified in technology business investing
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External There are three major external environmental influences that have had a major impact on business over the past three to five years. Data collected from six environments‚ including demographics‚ technology‚ soci-cultural‚ economic‚ political-legal‚ and global identify these three “big deltas”. The information gathered illustrates that the three big deltas are increasing interconnectivity‚ the changing face of America‚ and changing dominant world power. Unless indicated‚ all data points have
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megabyte of disk storage has gone done 40% per year from 1980-1995. Seagate believes that in order to stay competitive they must aggressively enhance product offerings and reduce prices. They also believe that in addition to that‚ they need to provide timely introductions and reduce production costs. However‚ the surging global demand in this industry is causing some facilities to run at full capacity very frequently‚ so Seagate needs to tailor its manufacturing strategy for these new products they’re
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