“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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the transitions: 1. Use of a risk hedging financial contract‚ the swap. 2. Acquisition of an undervalued target. 3. Evading tax liability. The management under the advisory of analyst believe that the company requires to make intensive‚ heavy investments which is not feasible if the Seagate Inc. remains a public company The other capital reorganisations alternatives are involving significant tax liability and considering the present nature of events that Seagate is a public Company‚ the tax liability
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Re: Seagate Technology 1. Describe the main terms of the Seagate Technology buyout? Why is Seagate undertaking this transaction? Is it necessary to divest the Veritas shares in a separate transaction? What are other alternative ways to create value? The primary contemplated terms would be to sell Seagate’s disk drive mfg assets including $765M in cash to Suez Acquisition Company controlled by Silver Lake Partners. The purchase would be financed by equity put up by Silver Lake and also by an‚
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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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“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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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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TERM SHEET Private Equity Acquisition of Seagate Technology This term sheet is intended to describe the general terms and conditions of a proposed acquisition of part of Seagate Technology. Parties | Silver Lake Partners and Seagate Technology | Transaction | Silver Lake will purchase (the “Transaction”) the disk drive business of Seagate Technology and $765 million cash | Transaction Price & Method of Transaction | The purchase price to be paid by Silver Lake to the Existing Shareholders
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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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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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