Seagate Buying Maxtor

[Taggart]

Originally posted by: kb315
"Seagate to buy Maxtor for $1.9B after instant rebate, mail-in rebate, and $15M off $75M coupon"

Stolen from Fark, but awesome.

That was a great line.

 

[hclarkjr]

Seagate (NYSE: STX) and Maxtor (NYSE: MXO) today jointly announced they have entered into a definitive agreement under which Seagate will acquire Maxtor in an all stock transaction. Under the terms of the agreement, which has been unanimously approved by the boards of directors of both companies, Maxtor shareholders will receive .37 shares of Seagate common stock for each Maxtor share they own. When the transaction is completed Seagate shareholders will own approximately 84% and Maxtor shareholders will own approximately 16% of the combined company. The value of the transaction is approximately $1.9 billion.

The combination of Seagate and Maxtor will build on Seagate?s foundation as the premier global hard disc drive company, leveraging the strength of Seagate?s significant operating scale to drive product innovation, maximize operational efficiencies, and realize significant cost synergies. These capabilities will enable the combined company to compete more effectively as the highly competitive data storage industry addresses the challenges and opportunities for significant growth that lie ahead. The combined company will be well-positioned to accelerate delivery of a diverse set of compelling and cost-effective solutions to the growing customer base for data storage products.

The combined company is expected to generate significant synergies, and the transaction is expected to be at least 10-20% accretive to Seagate on a cash EPS basis after the first full year of combined operations. As with other past combinations of disc drive manufacturers, revenue attrition is anticipated to result from this combination. Synergy estimates take into account anticipated revenue attrition. It is estimated that the incremental revenues will generate gross margins that are in line with the high end of Seagate?s stand-alone model. In addition, the combined company expects to achieve approximately $300 million of annual operating expense savings in connection with the transaction after the first full year of integration.

?Seagate is excited about the opportunity to achieve greater scale, reduce supply chain costs, and leverage combined R&D efforts across a broader product set. With the increased scale of the combined company, we can reduce overall product costs and provide more innovative products at more competitive prices,? said Bill Watkins, Seagate CEO. ?We believe this is a strategic combination that will provide value for our shareholders as well as benefits for our customers.?

?We believe this combination offers an exciting opportunity for our two companies to come together in a transaction that maximizes value for our stockholders, through the combination of an attractive premium and through future value enhancement of the combined company?s operations,? said Dr. C.S. Park, Maxtor chairman and CEO. ?Together, we will leverage our combined technical resources to deliver to our customers an even more compelling and diverse set of products, and get them to market more quickly and cost effectively.?

Steve Luczo, Seagate chairman, said "Seagate's board of directors is very enthusiastic about this unique combination and believes it will provide value for shareholders of both companies. This transaction has significant strategic and financial benefits, and the combined company will be better positioned to anticipate and serve the needs of the global customer base in the highly competitive data storage market."

Seagate?s executive management team will continue to serve in their current roles. The combined company will retain the Seagate name and executive offices will be located in Scotts Valley, California. Dr. Park will become a director of Seagate upon the closing of the transaction. Seagate?s chairman, CEO, executive vice presidents, and the principal equity investors affiliated with certain of Seagate?s Directors have committed to vote their shares in favor of the acquisition.

The transaction is expected to be completed in the second half of calendar 2006, subject to obtaining shareholder approvals and customary regulatory approvals. There is a termination fee of $300 million payable to Maxtor under certain conditions. The transaction is intended to be tax-free to Maxtor shareholders.

Prior to the closing, Seagate and Maxtor will operate as separate businesses.

Seagate's previously announced outlook for the December quarter of $2.2 billion in revenue and earnings per share in the range of $0.53-$0.57, excluding non-cash stock based compensation, remains unchanged. Additionally, Seagate confirms its recently announced guidance for fiscal year 2006 earnings per share outlook of approximately $2.00, excluding non-cash stock based compensation.

 

[secretanchitman]

are they still gonna be called seagate? or will the name get changed to maxgate or something?

this is good, as 1 good company buys out an okayish company. ive had a couple of maxtor drives die out on me, so i have a little hatred towards them.

 

[robothouse77]

i work at maxtor 3 days before christmas. boy let me tell you what...

 

[hclarkjr]

maxtor has treated me great also, have 2 in my system now. western digital is the one that should be bashed more than maxtor. i have had 4 of them die on me versus none for maxtor.

 

[alien42]

Originally posted by: knyghtbyte

Originally posted by: Marlin1975
Yea maxtor is junk. Must be since dell is their biggest customer, and we all know dell only puts in hardware that is known to fail. :roll:

Get over yourself all the "this" harddrive maker is the worst etc... All hard drives will fail at one point. So saying XYZ is the worst just shows you don;t know jack about hard drives when you say "this" one is the best and "this" one is the worst.

lol, mebbe Dells cheaper systems always fail, but their 2nd top range and top range arnt usually too bad...certainly the 4 systems i've had were fine...

1st, top range at the time died through a lightening strike, not Dells fault, in fact the Hard drive in it actually survived enough to get most of the data off!

2nd, insurance replacement for first, top tier again, died cuz i overloaded it, stuck in a much more powerful graphics card than it came with (was 3 years old when i replaced card tho), doubled the ram, added another optical drive, added 2 more HDD......the PSU said agghhhhhh NO...lol..given that this system wasnt rated anywhere near that amount of stuff in it its not dells fault it died, and it did last 3 years of very heavy abuse.

3rd is still living and breathing good to this day (2.5 years old), currently in use by my mum as i gave it to her when i bought the fourth...

4th is still running lovely, no probs with hard drive even after a year of heavy abuse...heh....in fact Dell were nice enough to give me an underclocked 6800GT names the GTO with the system that was overclockable to a basic Ultra, not bad for half the price of an Ultra at the time...heh

so not all Dells are crap.....just buy the right model at the right time and you'll do well with Dell......

(coo, wonder if i could sell them that jingle...lol)

i think someones sarcasm meter is broken

 

[CraigRT]

Originally posted by: Marlin1975
Yea maxtor is junk. Must be since dell is their biggest customer, and we all know dell only puts in hardware that is known to fail. :roll:

Get over yourself all the "this" harddrive maker is the worst etc... All hard drives will fail at one point. So saying XYZ is the worst just shows you don;t know jack about hard drives when you say "this" one is the best and "this" one is the worst.

Whatever you say.. I say simple stats alone are good enough to decide which are best and which are worst...

 

[mwmorph]

Originally posted by: knyghtbyte

Originally posted by: Marlin1975
Yea maxtor is junk. Must be since dell is their biggest customer, and we all know dell only puts in hardware that is known to fail. :roll:

Get over yourself all the "this" harddrive maker is the worst etc... All hard drives will fail at one point. So saying XYZ is the worst just shows you don;t know jack about hard drives when you say "this" one is the best and "this" one is the worst.

lol, mebbe Dells cheaper systems always fail, but their 2nd top range and top range arnt usually too bad...certainly the 4 systems i've had were fine...

1st, top range at the time died through a lightening strike, not Dells fault, in fact the Hard drive in it actually survived enough to get most of the data off!

2nd, insurance replacement for first, top tier again, died cuz i overloaded it, stuck in a much more powerful graphics card than it came with (was 3 years old when i replaced card tho), doubled the ram, added another optical drive, added 2 more HDD......the PSU said agghhhhhh NO...lol..given that this system wasnt rated anywhere near that amount of stuff in it its not dells fault it died, and it did last 3 years of very heavy abuse.

3rd is still living and breathing good to this day (2.5 years old), currently in use by my mum as i gave it to her when i bought the fourth...

4th is still running lovely, no probs with hard drive even after a year of heavy abuse...heh....in fact Dell were nice enough to give me an underclocked 6800GT names the GTO with the system that was overclockable to a basic Ultra, not bad for half the price of an Ultra at the time...heh

so not all Dells are crap.....just buy the right model at the right time and you'll do well with Dell......

(coo, wonder if i could sell them that jingle...lol)

um im pretty sure marlin was trying to be sarcastic, hence the eye roll smiley.

Originally posted by: CraigRT

Originally posted by: Marlin1975
Yea maxtor is junk. Must be since dell is their biggest customer, and we all know dell only puts in hardware that is known to fail. :roll:

Get over yourself all the "this" harddrive maker is the worst etc... All hard drives will fail at one point. So saying XYZ is the worst just shows you don;t know jack about hard drives when you say "this" one is the best and "this" one is the worst.

Whatever you say.. I say simple stats alone are good enough to decide which are best and which are worst...

seagate isnt exactly reliable.
7200.7 reliability
http://www.storagereview.com/articles/200306/20030615ST3160023A_7.html

seagate 7200.8 reliability
http://www.storagereview.com/articles/200504/20050414ST3400832AS_7.html

7200.9 reliability
http://www.storagereview.com/articles/200510/ST3500641AS_7.html

7200.7 were good. 7200.8 not so much. 7200.9 are too early to tell.

maxtor diamondmaxes is somewhat better than the 7200.8

Diamondmax9
http://www.storagereview.com/articles/200302/200302276Y200x0_7.html

Diamondmax 8
http://www.storagereview.com/articles/200303/200303186E040L0_7.html

 

[PandaBear]

I work for Maxtor too, from what I heard Seagate buy us for the following reason:

They want MMC (our media division, they need more media for their shipment)
They want our new manufacturing plants in China that is just finished, state of the art, for their production volume
They want one less player in the market so DELL and other OEM can't just go around and drive down cost

They will keep us employed for 6 months, but after that, since Seagate's design and yield is better, they will just cancel Maxtor's product and lay off most people.

The bargaining power alone is already worth the money they paid for.

 

[robothouse77]

Originally posted by: PandaBear
I work for Maxtor too, from what I heard Seagate buy us for the following reason:

They want MMC (our media division, they need more media for their shipment)
They want our new manufacturing plants in China that is just finished, state of the art, for their production volume
They want one less player in the market so DELL and other OEM can't just go around and drive down cost

They will keep us employed for 6 months, but after that, since Seagate's design and yield is better, they will just cancel Maxtor's product and lay off most people.

The bargaining power alone is already worth the money they paid for.

what site are you at?

have you posted your resume yet anywhere?

 

[AStar617]

The combination of Seagate and Maxtor will build on Seagate?s foundation as the premier global hard disc drive company, leveraging the strength of Seagate?s significant operating scale to drive product innovation, maximize operational efficiencies, and realize significant cost synergies.

The whole last half of that statement is pure bullsh!t. :laugh:

 

[Lonyo]

I have 3 Maxtor drives I just bought (2 arrived today, one I got 6 months ago).
I wonder what the warranty will be.

 

[BlingBlingArsch]

Is Maxtor so broke or why do they have to sell their stuff to Seagate? I dont understand, afaik last quarter seagate had 30% marketshare, Western Digital 18% and Maxtor 13,5 percent. Thats a huge deal on the market and iam confizzled why Maxtor cant refuse the hostile attack.

 

[sharkeeper]

Should be interesting especially the SCSI drives. Maxtor kept Quantum's SCSI division. Wonder how this will pan out.

Cheers!

 

[Hacp]

seagator

 

[Trikat]

Originally posted by: Nocturnal
5 year warranty from Maxtor????????????????????

Nah, Maxtor drives suck too much to get 5 years warranty.

Recently had a maxtor die. 250giger. :/

 

[Ricemarine]

Originally posted by: Trikat

Originally posted by: Nocturnal
5 year warranty from Maxtor????????????????????

Nah, Maxtor drives suck too much to get 5 years warranty.

Recently had a maxtor die. 250giger. :/

Aww

 

[InlineFive]

I hope Seagate quality doesn't falter.

 

[UNCjigga]

Originally posted by: geecee
Wow. Crazy. I like having many different HD manufacturers to choose from. With Maxtor out of the business, we're looking at Seagate, WD, Fujitsu and Samsung, I think? Maybe Toshiba on the notebook side? Maxtor itself actually acquired Quantum a few years back.

Wait...what happened to Hitachi/IBM?

 

[PandaBear]

Is Maxtor so broke or why do they have to sell their stuff to Seagate? I dont understand, afaik last quarter seagate had 30% marketshare, Western Digital 18% and Maxtor 13,5 percent. Thats a huge deal on the market and iam confizzled why Maxtor cant refuse the hostile attack.

Their problem is not in this generation, but next generation product.

Maxtor isn't broke yet, but they have some problem bring up the yield of 300/500gb series (common knowledge here), as well as many projects getting canned by inaccurate marketting (killing the 2.5" last year when it is almost production ready, switch the team to 1" micro drive, then Ipod Nano shows up and they kill the 1" and switch it back to 2.5", wasting even more money and fall further behind the competition).

They are fine right now, but didn't have high cap drives to sell for high margin like Seagate and Hitachi. Some customer (DELL, etc) are complaining that they don't have a full product line and threaten to drop them if they don't get 2.5" soon.

Not to mention not having a head division like Hitachi, Seagate, or WD hurt their margin real bad.

Also, when someone give you 50% premium, why not take the money and sell the business? Maxtor was losing $ for a few quarters already and C.S. Park is really worried, warning the executives in front of the employees. If I were him I would sold the company too.

 

[GoPackGo]

So the new name is going to be

ConnMaxSeaQuantumgatetorer

 

[GoPackGo]

Originally posted by: GoPackGo
So the new name is going to be

ConnMaxSeaQuantumgatetorer

Edit...

For those who remember seagate bought conner
maxtor bought quantum
now seagate is buying maxtor

Whats Next?

 

[GoPackGo]

Originally posted by: GoPackGo

Originally posted by: GoPackGo
So the new name is going to be

ConnMaxSeaQuantumgatetorer

Edit...

For those who remember seagate bought conner
maxtor bought quantum
now seagate is buying maxtor

Whats Next?

Better yet, I think the SyQuest name is available.

 

[GhettoFob]

Sextor

 

[Horus]

Wow, this many people have had problems with Maxtor hard-drives?

I've owned 3.

My 8 gig is still in use in someone else's system, running strong since 1998!

My 60 gig is now the system drive in a friends's fileserver, running strong since 2001

My new 160GB SATA is working like a charm as well!

The ONLY drive manufacturer i've had a problem with is Fujitsu. my lappy drive crapped out a week out of warantee