Seagate Will Go Private in $20 Bln Deal

Seagate Technology Inc. today announced a $20 billion deal that will make the world's No. 1 computer disk-drive maker a private company, and sells off its 33 percent stake Veritas Software Inc. back to Veritas.

According to a press release:



"VERITAS Software will acquire Seagate, which then will exclusively hold 128 million shares of
VERITAS Software, the investment securities of SanDisk, Gadzoox Networks, CVC, and Dragon
Systems and cash. Immediately prior to this merger, a new company formed by an investor group led by Silver Lake will purchase all of Seagate’s operating businesses for approximately $2 billion in cash."

A rather complex deal, where Seagate stockholders will receive merger consideration consisting of:

• 109.3 million VERITAS Software shares issued for the approximately 128 million VERITAS
  Software shares Seagate presently owns,

• additional VERITAS Software shares issued for the investment securities and, at VERITAS
  Software’s election, for up to $750 million in retained cash, and

• all cash on the Seagate balance sheet in excess of $800 million of cash working capital and after giving effect to VERITAS Software retained cash, debt repayment, taxes and other liabilities.

Silverlake Partnersa, private investment firm basically will get the world's No.1 disk-drive company for $2 billion in cash, then gets 800 million dollars cash back.

“This transaction epitomizes the mission of Silver Lake,” said Roger McNamee, co-founder of Silver Lake Partners. “As a private company, Seagate will be free to make the investments and take the strategic steps necessary to extend its leadership position in the storage industry.”

Seagate divulged that its stockholders will receive about $77.50 a share for their Seagate stock, that is 0.467 Veritas Software shares and $5 in cash.