Seagate Ends Private-Equity Buyout Talks

IDG News Service - Seagate Technology ( STX ) has closed off talks on a future private-equity buyout whilst adage the hard-disk-drive marketplace has improved.

The creator of consumer and craving storage mentioned Monday its house of directors had finished discussions with in isolation equity firms about a probable treat to take Seagate private. "The indications of the gratefulness operation were not in the most appropriate fascination of the firm and its shareholders," Seagate mentioned in a press release.

In October the firm mentioned it had received a rough denote of fascination in such a treat and was in talks with an unclear third celebration about it.

Also on Monday, Seagate released its initial predict is to stream quarter, finale Dec. 31, after disappearing to make a when it reported its mercantile first-quarter results on Oct. 20.

Seagate mentioned it expects income of at least US$2.7 billion, down from roughly $3.03 billion a year earlier. The firm expects sum border of 19.5 percent in the quarter, down from sum border of 30.5 percent a year earlier.

However, Seagate mentioned it believes urge for hard drives has improved, with the complete existing marketplace approaching to be scarcely 170 million hard drives in this quarter. That would act for an enlargement from 160 million hard drives a year earlier. Declining product prices can contract income and margins even as section shipments grow.

Seagate's explanation on the marketplace standpoint show that the hard-drive industry's efforts to revive a change between supply and demand, thus negligence cost declines, are having a few impact, mentioned IDC researcher John Rydning.

This has been a hard year for Seagate, with opponent Western Digital leading it in hard-drive section shipments is to initial time in the initial monthly calendar quarter, according to researcher firms iSuppli and IDC. At the same time, spark storage components such as SSDs (solid-state drives) are encroaching on normal spinning hard drives, the core of Seagate's business, by gift descend power expenditure and aloft speed.

However, Seagate didn't have to ponder receiving the firm in isolation out of desperation, mentioned Henry Baltazar, an researcher at The 451 Group.

"It's still a cash-generating, really burly business," Baltazar said. Seagate might have deliberate such a treat simply since it would keep the firm from having to exhibit so many details about its business every quarter, he said.

Because of its size, Seagate has multi-part options for addressing the direction toward solid-state storage, that is still in its early days, he said. "There are unquestionably merger targets to be had," and Seagate could still turn a personality in the space by inner development, too, Baltazar said.

One way Seagate has already addressed the solid-state direction is with hybrid drives, that are hard drives with an integrated cache of spark chips for faster response. These are matched often to consumer PCs, Baltazar said. Seagate has moreover introduced the Pulsar line of SSDs for craving information centers. But the firm still needs to improved residence solid-state storage in craving information centers, Baltazar said.

Also on Monday, Seagate mentioned its house had certified the firm to purchase back as ample as $2 billion value of its shares to be able to show off shareholder returns.

Seagate shares on the Nasdaq (STX) were down $0.80 at $13.05 in after-hours trade late Monday.