Another option for Seagate is to perform a merger or tax-free spin-off, which will make the individual section of the company to become its own business entity, and it also qualifies as reorganization under the law as tax-free transaction.

Seagate Technology Buyout Case Solution

Seagate Technology Buyout Case Solution

A buyout transaction via private equity fund is also a possible solution. There can be a difference between the interest of private equity funds and those of the public investors. The limited partners might not have any interest in holding the shares that have been distributed to them but they would still want to invest the proceeds of selling these shares elsewhere. Private equity returns can also be credited to a large extent to financial maneuvering than the managerial skills.

Possible Results:

The price of the disk-drive business should satisfy the shareholders of Seagate. Price should also satisfy the Silver Lake Partners and private equity investors. The financing of LBO should also consider the mix of equity and debt. The merger of both companies needs to be attractive to the shareholders of VERITAS and the share price of Seagate should also improve…………………………….

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