Seagate Expresses Intention to Become a Private Company

While such things don't happen very often, it seems that Seagate may be planning on once again turning into a private company, the HDD maker supposedly already holding talks with certain potential buyers.

Seagate's stock has been decreasing since January but, overall, it seems to be holding its own well enough as a supplier of hard disk drives.

Still, over the next few years, it is expected that solid state drives will progressively eat away at the market share of such storage units.

Now, rumors have started to circulate, saying that Seagate is considering turning into a private company again.

What this means is that it is holding talks of acquisition with certain market entities, the ones mentioned being Texas Pacific Group (TPG) and KKP.

The board of directors is said to be already evaluating its options, not just these two but other strategic alternatives as well.

Nevertheless, the exact reasons for which the company may be interested in becoming private again are not entirely clear.

“There is a lot of untapped value in the market, and private-equity funds in particular have raised a lot of money and they’re at the point where they need to invest it or give it back. They rarely do the latter,” said Rich Kugele, an analyst with Needham & Co.

That Seagate may be in need of a tangible reshape now that SSDs are gaining ground is one of the possible motivations behind this development.

On the other hand, there is no clear indication that the company would actually get a formal offer, even though TPG is said to be interested, so whether or not an actual transaction will be made remains little more than a cause for speculation.

If a deal is signed, however, Seagate will become a private company for the second time since the year 2000.