Seagate

Analysis of Seagate Technology Buyout Contents in Brief 1. background 2. Report Objectives and Methods of Analysis 3. Motive 4. Leveraged Buyouts & manufacture Overview 5. Optimal Debt / candor Combination for Buyout 6. Optimal Debt Structure &Valuation 7. Conclusions and Recommendations decision noble Summary: Seagate Technology Inc needs to provide their shareholders a head to overcome the undervaluation that persists in the marketplace. A complex leveraged buyout has been proposed by fluent 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 focussing and the buyout team supplement their equity contributions by adding $900 million of supererogatory debt to Sea gates existing capital structure. This puts Seagates approximate debt take for granted aim just above 60%. Background In November 1999, Seagate Technology, Inc. teamed up with facile Lake Partners to evaluate a major restructuring proposal.

This curtain raising was prompted by a perceived market inefficiency as a result of the sales event of Seagates Network & fund Management Group to VERITAS computer software earlier in the year. In exchange, Seagate received shares of VERITAS equaling 40% owner channel. VERITASs stock charge change magnitude significantly, more than 200%, forthwith undermentioned the transition. During the same time period, Seagates stock increased just now by 25%. The market appeared to b! e duty date no value to Seagates disk drive business. The caller 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 earlier agreements with VERITAS and by the fact that such sales were taxable. Management...If you want to turn a full essay, order it on our website: OrderEssay.net

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