Seagate to give IPO a second go
Published: 14 Oct 2002 15:10 BST
Seagate Technology announced Friday that it has filed for an initial public offering with the Securities and Exchange Commission.
The hard-drive maker had been a publicly traded company but went private in early 2000 when the company's hard drive business was acquired by a group of investors led by Silver Lake Partners for nearly $1.7bn.
Intense competition and slim margins have plagued many hard drive makers. Seagate is one of the leading manufacturers of hard drives for large businesses as well as for consumer electronics and PCs.
Company representatives declined to comment on the filing, citing a quiet period. Seagate is hoping to raise $1bn through the IPO, based on the company's registration filing fee.
Considering the current market climate, Seagate's venture into the public markets is a daring move, analysts said.
"This is an awful time for any company to go public, because the valuations they'll receive are so low," said David Menlow, president of IPOfinancial.com.
Despite concerns, the hard drive maker still has some things in its favour. For one, it's profitable. Seagate posted an operating profit of $374m on revenue of nearly $6.1bn in 2002, an improvement on its financial performance when it went private in 2000. That year Seagate reported an operating loss of $285m on revenue of nearly $6.1bn.
The company has also increased its share in the enterprise storage market, from 36 percent four years ago to 60 percent this year -- mostly at the expense of IBM, said Hoefer and Arnett analyst Mark Miller.
Morgan Stanley and Salomon Smith Barney will serve as lead bankers for the offering.
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