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Seagate Leverage Buyout Essay

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Below is an essay on "Seagate Leverage Buyout" from Anti Essays, your source for research papers, essays, and term paper examples.

Disk Driv e I ndu st ry
Bac kgro und
Hard disk driv es mak e up the largest sec to r of the info rmation storage industry in 1 999. T he hard disk driv e
mark et c an be c lassified into three separate c ategories, desk to p, enterprise, and mo bile. T he mobile and
desk to p mark ets are ex pec ted to c onv erge in the long run. While the desk top mark et represents
approx imately 5 8% o f the $ 25 billion total hard disk driv e mark et, enterprise margins were nearly double
the margins in the desk to p sec tor (1 0-1 5 % ). Sinc e 1 997 , the number o f disk driv e units sold has gro wn while
pric es hav e dropped dramatic ally , c ausing ov erall rev enues to dec line. T his situation is ex pec ted to
c o ntinue, with rev enue growth lagging f ar behind unit growth due to the v igo rous c o mpetitio n between disk
driv e manuf ac turers.
Gro w th Oppo rtunitie s
One identified growth o pportunity within the disk driv e industry is sto rage network ing, whic h prov ides disk
driv e manuf ac turers the ability to diff erentiate their pro duc ts. T he other identif ied gro wth o ppo rtunity is
within the c onsumer elec tro nic s mark et. While only projec ted to hav e sales o f $ 0.5 billio n in 2000, the
c o nsumer elec tro nic s mark et is ex pec ted to grow ov er 5 0% annually ov er the nex t three y ears.
Seagat e's Underv aluat ion
Bac kgro und
Founded in 1 97 9, Seagate T ec hnology , I nc . is the mark et leading manuf ac turer of c o mputer hard driv es,
o wning 21 .1 % o f the total disk driv e mark et in 1 999, an industry where six c o mpanies ac c ount for 95 % o f
sales. Seagate also had the largest mark et share o f the Enterprise (4 1 % ) and Desk to p (21 .1 % ) disk driv e
mark et sec tors in 1 999.
I n May 1 999, Seagate sold its Network & Storage Management Group to V ERI T A S Sof tware Co rpo ratio n, an
independent manufac turer of sto rage management sy stems, fo r appro x imately 1 5 5 millio n shares o f
V ERI T A S...

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Seagate Leverage Buyout. Anti Essays. Retrieved December 12, 2018, from the World Wide Web: http://snehaedu.com/free-essays/Seagate-Leverage-Buyout-358032.html