TPG, KKR in talks to buy Seagate for $7.55 bn

TPG Capital and KKR & Co are in talks to acquire Seagate Technology Plc, a deal that would mark the disk-drive maker’s second leveraged buyout in a decade, according to people with direct knowledge of the discussions.

The private-equity firms are considering an offer of about $16 a share, which would value the company at $7.55 billion, said two of the people, who declined to be identified because the discussions are private. The firms are looking to contribute about $4 billion in equity and may seek other buyout funds as partners, the people said. Bain Capital LLC also is interested in the deal, according to one person familiar with the firm.

Seagate said yesterday it was in talks to be taken private, without identifying the parties involved, sending the shares up 22 per cent in extended trading. TPG rekindled discussions with Seagate after an earlier proposal with Silver Lake broke down, the people said. TPG persisted in trying to keep the deal alive, entreating other firms to get involved, according to the people.

Seagate’s buyout is shaking up the tech industry and we’ll see more M&As as the boom in smartphones and tablet PCs causes a paradigm shift,” said Seiichiro Iwamoto, who helps oversee $35 billion in Tokyo at Mizuho Asset Management Co.