Seagate Pursuing Controlling Interest In LaCie
Seagate announced today that they will be pursuing a controlling interest in LaCie. The two companies deal in complementary areas of the storage industry with Seagate manufacturing drives and LaCie developing mobile and desktop drive enclosures and NAS solutions. In order to achieve a controlling (more than 50%) interest in the company, Seagate has offered to purchase all of Philippe Spruch’s–LaCie’s Chairman and CEO–shares. In addition to shares from an unnamed affiliate, such a buy would net Seagate 64.5% of outstanding shares of LaCie stock. Seagate is offering the LaCie shareholders €4.05 (approximately $5.09 USD) for their stock, and may be increased to as much as €4.17 should Seagate get 95% of LaCie shares and voting rights within 6 months of closing.
The merging of Seagate and LaCie logos (hehe).
After acquiring a controlling interest, they would then work to buy back all other otustanding shares with a cash offer. The initial purchase of stock is still pending governmental approval. Ricol Lasteyrie & Associates has been appointed as an independent expert by the board of directors for LaCie to examine the offer and determine whether or not to accept. Should it go through, Philippe Spruch would join Seagate as the president of Seagate’s consumer storage division. He would have the current Seagate vice president Patrick Connolly and LaCie deputy general manager Pierre van der Elst reporting to him. At this time, Seagate has not disclosed how much the former LaCie employees would be paid to work for Seagate. If all the appropriate governing bodies “okay” it, the buyout is expected to happen in the third quarter of 2012 (Q3 2012).
Steve Luczo, Seagate chairman, president and CEO was quoted in the press release in stating: “Seagate has a strong commitment to the growing consumer storage market and bringing the most dynamic products to market. 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."
The combination of Seagate and LaCie seems odd a first, because LaCie does not manufacture their own drives (so it’s not a hard drive patent portfolio Seagate is after); but they are actually complementary services. While Seagate has the hard drive storage down, LaCie has a lineup of drive enclosures and NAS boxes. By combining the two, Seagate can manufacture the drives and the enclosures themselves. Seagate does currently have a few enclosures but their expertise is primarily in the drive technology itself. The opposite is true to Lacie, so the two companies coming together is a good thing for Seagate. One thing that LaCie has done that instantly benefits Seagate is focusing on high end and premium drive enclosures. While Seagate has focused on low and midrange drive enclosures, LaCie has solely focused on high end. This is beneficial because Seagate can integrate those higher profit margin premium LaCie products into their lineup without the need for extensive research and development. Whether it will also result in an improved product lineup and/or cheaper products for consumers remains to be seen, but it has the potential to be a good thing.