Seagate poised to swallow LaCie, haul fattened bod into channel

Spinning disk supremo Seagate has nailed down an agreement from Paris-based external drive products manufacturer LaCie to snap it up, and LaCie is up for it – though the trade union and regulatory stuff is still being worked out.

If the transaction completes, Seagate will be able to round out its mainstream consumer storage products portfolio with LaCie's branded and designer consumer storage, network-attached storage hardware and software products.

It reckons: "The combination would accelerate Seagate’s growth strategy in the expanding consumer storage market, particularly in Europe and Japan, and add strong engineering and software development capabilities, as well as relationships with several key retailers."

It would also help Seagate compete against the Western Digital/Hitachi GST consumer drive products portfolio.

Seagate will gain controlling interest in LaCie with an offer of €4.05/share for 64.5 per cent of the shares – namely, those held by LaCie's chairman and CEO Philippe Spruch and his affiliate. But it still has to head off any concerns about antitrust from regulators on both sides of the ocean.

Seagate's release says:

Following receipt of governmental approvals and the close of this transaction, Seagate would commence an all-cash simplified tender offer (followed as the case may be by a squeeze-out procedure) to acquire the remaining outstanding shares in accordance with the General Regulation of the French Autorité des Marchés Financiers (AMF).

There is a conditional supplement of 3 per cent. The offer values LaCie around €146m ($186m) total equity value, including acquired net cash of approximately €49m ($65m), as of 31 March this year. The €4.05 per share price represents a premium of 29 per cent to LaCie’s average closing stock price over the 30 trading days ended on 22 May.

If the transaction completes, Philippe Spruch would join Seagate and head up its consumer storage products organisation. Patrick Connolly, the VP and general manager of Seagate’s retail group, would then report to him, as would Pierre van der Elst, the deputy general manager of LaCie.

Seagate chairman and CEO Steve Luczo said: "LaCie has built an exceptional consumer brand by delivering exciting and innovative high-end products for many years. This transaction would bring a highly complementary set of capabilities to Seagate, significantly expand our consumer product offerings, add a premium-branded direct-attached storage line, strengthen our network-attached storage business line and enhance our capabilities in software development.”

Seagate can expand LaCie's channel. Spruch said: "Consumer demand for high-quality branded storage solutions continues to grow. We are excited about the potential for this combination to benefit customers and employees by creating significant scale and opening up new markets. We look forward to making the resources of a much larger company available to our customers around the world."

The transaction is complicated. The initial share purchase transaction is expected to close in the third calendar quarter of 2012 pending completion of the relevant governmental reviews. Seagate would then make a tender offer for the remaining outstanding shares of LaCie, subject to a clearance decision from the AMF. That tender offer is expected to also complete in the third calendar quarter of 2012. Seagate says "the transaction is subject to regulatory approval in the United States (antitrust filing), France (approval of foreign investments by the Ministry of Finance) and other jurisdictions (antitrust filing in Germany) and to other customary closing conditions."

It looks a good deal, with Seagate getting the LaCie boss man and the company. It should put some fire into its consumer disk drive product sales and give it a leg up into the smallish NAS market. ®