Seagate

Analysis of Seagate Technology Buyout Contents in Brief 1. minimise 2. Report Objectives and Methods of Analysis 3. Motive 4. Leveraged Buyouts & manufacture Overview 5. Optimal Debt / impartiality Combination for Buyout 6. Optimal Debt Structure &Valuation 7. Conclusions and Recommendations decision maker Summary: Seagate Technology Inc needs to provide their shareholders a steering to overcome the undervaluation that persists in the marketplace. A complex leveraged buyout has been proposed by fluid Lake Partners that isolates the Seagate disk drive business and returns the current investment in VERITAS back to the shareholders with minimal tax impact. The resulting valuation of Seagate indicates that the remaining assets should be valued at $1,500 million. Based on this valuation, it is our recommendation that advocate and the buyout team supplement their equity contributions by adding $900 million of redundant debt to Se agates existing capital structure. This puts Seagates approximate debt reappearance aim just above 60%. Background In November 1999, Seagate Technology, Inc. teamed up with facile Lake Partners to evaluate a major restructuring proposal.

This initiatory was prompted by a perceived market inefficiency as a result of the sales event of Seagates Network & retention Management Group to VERITAS computer software earlier in the year. In exchange, Seagate received shares of VERITAS equaling 40% owner enchant. VERITASs stock hurt change magnitude significantly, more than 200%, forthwith pursuance the transition. During the same time period, Seagates stock increased lone(pren ominal) by 25%. The market appeared to be ! duty grant no value to Seagates disk drive business. The company identified this as a problem and began to look for ship canal to unlock the value it saw in the VERITAS stake, including exchange rough of the VERITAS shares. Seagates options were limited contractually by forward agreements with VERITAS and by the fact that such sales were taxable. Management...If you want to find oneself a full essay, order it on our website: OrderEssay.net

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