Reference no: EM133084794
M-F-PEQ-21-B21: Private Equity
Please answer the following questions on the Seagate Technology Buyout case:
Question 1. Why is Seagate (SG) undertaking the buyout transaction?
Question 2. Is it necessary to divest the Veritas shares in a separate transaction? Give reasons for your answer. Who do you think are winners and losers from the transaction?
Question 3. What are the benefits of leveraged buyouts (LBOs)?What kind of risks are involvedin LBOs?
Question 4. Is the disk drive industry a good industry for a LBO (consider yourself in year 2000)? Given the recent developments and move to cloud storage, would your answer change now?
Question 5. What characteristics make a company a good buyout target? Is Seagate a good target for an LBO?
Question 6. What are different conflicts of interest in an buyout (MBO)? How are these conflicts resolved in case of Seagate?
Question 7. Seagate's operating assets have been valued under the following scenarios:
• The buyout team plans to maintain its debt at a constant percentage of the firm's market value;
• The buyout team plans to pay down its debt as cash flows permit until a terminal debt level of $700m is reached.
Comment on the differences between the valuation models used for each of these scenarios.
Attachment:- Private Equity.rar
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