Seagate Technology files for IPO
Seagate Technology files for IPO
Seagate Technology has re-emerged from a period of two years of being a private company by filing to relist its shares, in a move that could herald M&A activity in the depressed storage sector.
The company filed an S-1 form with the Securities and Exchanges Commission on Friday to start an initial public offering (IPO) on either the NY Stock Exchange or the NASDAQ. No date, size, or pricing details for the listing were included in the document.
While the current sour flavour of investor sentiment towards technology stocks in general might seem to preclude Seagate from listing any time soon if they want to raise a decent amount of money, an IPO would allow the company to use its own stock as equity in acquisitions of its competitors, many of whom are valued as low than they have been for five years or more.
Seagate Technology's main product lines are the Barracuda and Cheetah families of hard disk drives. The company cited research by analyst firm IDC suggesting that it held a 28.3 per cent market share in the hard disk drive sector in the fiscal year of 2002, up from 23.5 per cent in 2000/01. In Seagate Technology's profit results for the third quarter of 2002, also announced on Friday, the company reported record sales of 16.7 million units, and an increased profit of US$110 million on revenues of US$1.579 billion.
Seagate Technology Holdings is a privately-held company which was set up in November 2000 to offload the hard disk drive and storage area network hardware businesses of the market-listed Seagate Technology Inc. At the time, Seagate had owned a third of Veritas Software, which it sold back to Veritas.
The investment firms which engineered the deal in November 2000, which effectively delisted the company, are now behind the push to relist. Silver Lake Partners was the organising force behind the deal, along with Seagate's own management. Other investors include the J.P. Morgan Partners, Texas Pacific Group, August Capital, and investment funds affiliated with Goldman Sachs. Veritas is no longer involved with the company at an equity level.
The S-1 form was very light on for details, but it was disclosed that the pro forma net tangible book value of the company's assets totalled US$635 million.
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