Why is seagate undertaking this transaction

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Reference no: EM133650046

Questions

1. Why is Seagate undertaking this transaction? Is it necessary to divest the Veritas shares in a separate transaction? Who are the winners and losers resulting from the transaction? Given the benefits of leveraged buyouts (LBO's), is the rigid disk drive industry conducive to an LBO?

2. Luczo and the buyout team plan to finance their acquisition of Seagate's operating assets using a combination of debt and equity. How much debt would you recommend that they use? Why?

3. Based on the scenarios presented in Exhibit 8 and on your assessment of the optimal amount of debt in the deal structure and going forward, how much are Seagate's operating assets worth? Assume that of the $800 million in cash that the buyout team will acquire as part of the transaction, $500 million is required for net working capital and $300 million is excess cash.

Reference no: EM133650046

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