Seagate Technologies, the computer-disk manufacturer which employs just under 2,000 people in Northern Ireland, is to go private in a $20 billion (€20.87 billion) deal.
The deal is believed to be the first instance of such a large and well-established technology company being taken private. It is expected to be finalised in the last quarter of this year and will create the biggest private high-tech firm in Silicon Valley.
Under the terms of the deal Seagate is selling its 33 per cent stake in Veritas Software, a maker of software that stores and manages digital information. Meanwhile, Veritas acquires Seagate for cash and stock, but sells Seagate's disk-drive, digitaltape and other businesses to private investors - including Seagate management - for just $2 billion in cash.
The arrangement allows Veritas to reclaim the 128 million of its shares that are currently owned by Seagate, while paying out only 109.3 million new shares, plus cash, for Seagate.
Seagate said the transaction, which values Seagate shares at $77.50 based on Tuesday's closing price, represented a 26 per cent premium to Seagate's average stock price over the last 30 trading days and an 87 per cent premium to the average stock price over the last six months.
The investor group buying Seagate's businesses is led by an investment group, Silver Lake Partners. It includes Seagate management and the investment firm, Texas Pacific Group.
"Becoming a private company will allow us to focus on strengthening our core storage business," said Mr Steve Luczo, chief executive officer of Seagate. "We will continue to implement advanced manufacturing technologies, drive operational efficiencies, and position the company for growth."
Seagate Technologies was the first major Silicon Valley-based high technology investor secured by the Industrial Development Board for Northern Ireland in 1993. It has two large manufacturing plants in Northern Ireland. The Derry plant makes thin film heads for disk drives while the one in Limavady makes nickel plated and polished aluminium substrates.
Seagate Technologies pulled out of the Republic in 1997 when it announced the closure of its Clonmel plant employing 1,400 people. A plan for a 1,000-job investment in Ringaskiddy, Co Cork has not come to fruition.
