| Headline: Deal secured after horse trading Source: Euromoney Date: February 2001 Author: Anony Currie Companies: Seagate Technology, Veritas Software, Silver Lake PartnersDeal: synthetic spin-off and leveraged buy-outSize: $20 billion LBODate: November 1999-March 2000
This deal stands as a classic example of how to execute a complex transaction to the near-benefit of all parties. Two companies, a new buy-out firm (Silver Lake), the three big tech banking rivals, who just also happen each to own a small stake in Silver Lake, and a major tax headache as a result of an earlier stock-for-acquisition deal, all had the potential to turn this deal into the biggest mess of the year. In the event, it was just the opposite. The rationale behind the deal starts with Seagate’s desire to get its share price moving, feeling, rightly, that it was undervalued. By the end, Seagate ceased to exist, and there were no hard feelings about it. Step back to mid-1999. Seagate was a company with two major business lines: disk drives and software. | |||||||||||||||||||||||||||||||||||||||||