Seagate Confirms Buyout Talks Underway

[Dave76]

No guarantee that a deal will happen at this time

The traditional hard drive market is down with many computers, tablets, and other electronic devices that need storage moving to faster and more rugged flash-based offerings. That means that sales of traditional HDDs are faltering due to increased demand on the market for tabletslike the iPad that are taking sales from the notebooks and netbooks.

The largest hard drive maker in the market is Seagate and the company has announced that it is in talks to be purchased by a private buyer and taken off the publicly traded market. Seagate is mum on exactly what company it is in talks with and this is not the first time that Seagate has entered talks with a buyer.

Reuters reports that TPG Capital and private equity firm Silver Lake held early talks with Seagate on a buyout previously, but that deal never materialized. Reuters cites a source familiar with the matter that claims Silver Lake is no longer involved in the talks and TPG is either working with another party on new buyout talks or is actively seeking a partner for a possible purchase of Seagate.

None of the involved parties has offered any comment on the talks so far. Seagate also notes that at this point there is no assurance that a deal will be accepted or offered. Seagate's board is evaluating the offer and other alternatives. This is the first time that Seagate has offered confirmation that talks of a buyout were underway.

Analyst Kaushik Roy from Wedbush Securities says that the reason private equity firms are eyeing Seagate is that its stock price is down to low levels. Roy figures that Seagate is looking good to equity firms that want to buy now and wait out the poor demand for HDDs because demand is expected to improve. Seagate is also taking steps to become a player in the SSD market with it and Samsung announcing a joint development deal recently.

Roy said, "The weakness in the stock is in end-demand and market related, it's not that the company is mis-executing. So private equity is looking at it and saying, geez, these are cheap stocks."

Source ...

 

[LiquidSnak]

Maybe they will get bought and their quality control division will get a budget.

 

[Lee]

This was bound to happen sooner then later. With the advent of SSD's , and faster Flash drives the HDD market was sure to start taking a big hit.

It seems funny that Seagate and Western Digital hadn't moved into the SSD market. Hind seek.

 

[madtownidiot]

I won't go anywhere near seagate HDDs after all the problems they had with the 7200.11 series

 

[Tepid]

I still recommend Seagate. Even with the problems they had.
With that episode behind them.
They still make some of the best drives available. With the best warranty.

If seagate does stop making drives. It will be a sad day for the market.
Unless the SSD market really starts slashing prices.

 

[s31]

It seems funny that Seagate and Western Digital hadn't moved into the SSD market. Hind seek.

WD make SSD's, dont know about seagate

 

[seekermeister]

This was bound to happen sooner then later. With the advent of SSD's , and faster Flash drives the HDD market was sure to start taking a big hit.

It seems funny that Seagate and Western Digital hadn't moved into the SSD market. Hind seek.

In a fashion, they have. I saw a Seagate hybrid offered on TigerDirect a few days ago, which combined a SSD and hard drive together. On the surface, it sounded like a good idea, but reading the customer reviews gave the impression that it didn't obtain the performance one might expect from a SSD.

 

[Zepher]

I still recommend Seagate. Even with the problems they had.
With that episode behind them.
They still make some of the best drives available. With the best warranty.

If seagate does stop making drives. It will be a sad day for the market.
Unless the SSD market really starts slashing prices.

WD has one of the best warranties as well, and is relatively painless. I had to RMA a 2 year old 500GB Blue Drive a few months ago and it was quick and painless done right through their website.

 

[Dave76]

Seagate is rumored to be starting to make SSDs for the OEM market.

Haven't seen much info on it.

 

[Layback Bear]

If the big hard drive companies start making large volumes of quality SSD the price should go down in a short period of time. Some company is going to do this because we want them big and priced right.

 

[Win7User512]

I won't go anywhere near seagate HDDs after all the problems they had with the 7200.11 series

I've had 3 laptop drives with no issues, as well as a 1TB from the 7200.12 series that is working just fine. I am aware of the 7200.11 issues, as you can see in my sig.

I had a 500GB WD die after just a month of having it.

 

[seekermeister]

I bought 4 500GB 7200.11s, none of which used the "bad" firmware. Out of those four, 2 have continued working properly, 1 became unusable because the plastic fin in the SATA slot broke off, and Seagate won't warrant it, and 1 is about to be RMAed for the fourth time. Obviously, their recertified drives used for warranty are trash.

I'm now wondering how their warranty program will fare...or continue, if the buyout succeeds?

 

[Woz]

The 7200.11 failures were a big black eye for Seagate. That may indeed be behind them now, but when any Seagate drive fails, people will bring up the 7200.11 fiasco. The Seagate name got tarnished badly.

I'm not saying that is the reason for the buyout, but it wouldn't surprise me.