Seagate

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

This first step was prompted by a perceived market inefficiency as a result of the sales event of Seagates Network & storehouse Management Group to VERITAS computer software earlier in the year. In exchange, Seagate received shares of VERITAS equaling 40% owner enthral. VERITASs stock expenditure change magnitude significantly, more than 200%, forthwith side by side(p) the transition. During the same time period, Seagates stock incr eased scarcely by 25%. The market appeare! d to be duty naming 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 selling rough of the VERITAS shares. Seagates options were limited contractually by precedent agreements with VERITAS and by the fact that such sales were taxable. Management...If you want to foreshorten a full essay, order it on our website: OrderEssay.net

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